The Boeing Company BA reported adjusted earnings of $4.80 per share for fourth-quarter 2017, beating the Zacks Consensus Estimate of $2.91 by 64.9%. The quarterly bottom line reflected an improvement of 94% from $2.47 in the year-ago quarter.
The upside was driven by record deliveries, strong performance as well as favorable tax reform of $1.74 per share.
Boeing Company (The) Price, Consensus and EPS Surprise
Boeing Company (The) Price, Consensus and EPS Surprise | Boeing Company (The) Quote
Excluding the one-time items, aerospace giant reported GAAP earnings of $5.18 per share compared with $2.59 per share in the year-ago quarter.
For 2017, the company posted adjusted earnings of $12.04 per share, beating the Zacks Consensus Estimate of $10.17 by 18.4%. Year over year, the GAAP earnings reflected an improvement of 66%.
Revenues
The company's fourth-quarter revenues amounted to $25.37 billion in the quarter, beating the Zacks Consensus Estimate of $24.83 billion by 2.2%. The top line also improved 9% year over year.
For 2017, the company posted revenues of $93.39 billion, beating the Zacks Consensus Estimate of $92.74 by 0.7%. However, year over year, the top-line figure reflected a decline of 1%.
Total Backlog
Backlog at the end of 2017 was up to $488.1 billion from $473.5 billion at the end of 2016-end. Reported backlog included $40 billion of net orders during 2017.
Quarterly Segment Results
Commercial Airplane Segment: The segment saw an 8% rise in revenues to $15.47 billion, on higher planned delivery volume and mix. Operating margin for the quarter expanded 320 basis points (bps) year over year to 11.5%.
Boeing reported commercial deliveries of 209 planes during the quarter, which was up 13%.
A look at Boeing’s fourth-quarter order details reveals that the company booked 414 net commercial orders (accounting for cancellations). Backlog for this segment was valued at $421 billion.
Boeing Defense, Space & Security (BDS): The segment witnessed an approximate 5% year-over-year increase in fourth-quarter revenues to $5.54 billion, driven by higher weapons deliveries. Operating margin for the quarter expanded 10 bps to 10%.
Backlog at BDS was $50 billion, 40% of which comprised orders from international clients.
Global Services: The segment saw 17% growth in revenues to $4.00 billion, reflecting growth across the company’s portfolio. Operating margin for the quarter contracted 120 basis points (bps) year over year to 15.4%, on account of commercial parts mix.
Boeing Capital Corporation (BCC): Boeing Capital reported quarterly revenues of $73 million compared with $687 million in the year-ago quarter. The segment’s earnings were $27 million compared with $23 million a year ago.
At the end of 2017, BCC's portfolio balance was $3 billion.
Financial Condition
Boeing exited 2017 with cash and cash equivalents of $8.81 billion and short-term and other investments of $1.18 billion. At year-end 2016, the company had $8.80 billion of cash and cash equivalents and $1.23 billion of short-term and other investments. Long-term debt was $9.78 billion at the end of 2017, up from $9.57 billion at 2016-end.
Boeing generated $13.34 billion of operating cash flow at the end of 2017, up 27.1% year over year. Free cash flow was $11.61 billion in 2017 compared with free cash of $7.89 billion at the end of 2016.
Guidance
Boeing’s adjusted or core earnings per share expectation for 2018 are in the range of $13.80-$14.00. GAAP earnings are projected in the range of $15.90-$16.10 per share.
The company currently expects 2018 revenues in the range of $96-$98 billion.
Commercial Airplanes' 2018 delivery expectations are reiterated in the band of 810 to 815 airplanes with revenues projected in the range of $59.5-$60.5 billion. Operating margin is now anticipated to be more than 11%.
The company projects 2018 defense revenues in the $21.5-$22.5 billion range. Operating margin is now anticipated to be above 11%.
Boeing Capital Corp. expects the aircraft finance portfolio to remain stable. The company anticipates its segment revenues to be approximately $0.2 billion.
Boeing's 2018 R&D is forecasted to be approximately $3.7 billion. Capital expenditures for 2018 is expected to be approximately $2.2 billion.
Zacks Rank
Boeing currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Press Release
Lockheed Martin Corp. LMT reported fourth-quarter 2017 adjusted earnings from continuing operations of $4.30 per share, which surpassed the Zacks Consensus Estimate of $4.06 by 5.9%. Its total revenues came in at $15.14 billion, which exceeded the Zacks Consensus Estimate of $14.75 billion by 2.6%.
Rockwell Collins Inc. COL reported results for first-quarter fiscal 2018 (ended Dec 31, 2017). The company’s adjusted earnings per share of $1.59 beat the Zacks Consensus Estimate of $1.53 by 3.9%. Its total sales were $2,011 million, which beat the Zacks Consensus Estimate of $1,988 million by 1.2%.
Raytheon Company RTN reported fourth-quarter 2017 adjusted earnings from continuing operations of $2.03 per share, beating the Zacks Consensus Estimate of $2.02 by 0.5%. The company’s fourth-quarter revenues of $6,783 million improved 8% year over year.
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