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The Boeing Company’s BA commercial airplanes business is expected to have benefited from increased 737 and 787 delivery figures in the first quarter.
However, the company’s first-quarter 2023 earnings, scheduled for release on Apr 26, are likely to reflect impacts of abnormal costs related to the 787 program.
Click here to know how the company’s overall Q1 performance is likely to have been.
Solid 737 & 787 Jet Deliveries to Boost Growth
Thanks to a steady recovery in air traffic (both domestic and international), improved delivery figures for Boeing’s 737 and 787 jets were observed in the soon-to-be-reported quarter. The aerospace giant delivered 113 737 jets in the same time frame, indicating a solid 31.4% improvement from 86 units delivered in the year-ago period.
The Boeing Company Price and EPS Surprise
The Boeing Company price-eps-surprise | The Boeing Company Quote
Moreover, Boeing delivered 11 787 Dreamliner jets in the first quarter of 2023, compared to none in the year-ago period, following this product line’s delivery resumption in the third quarter of 2022. This must have also boosted the Boeing Commercial Airplane (BCA) segment’s first-quarter top-line performance.
Such significant delivery figures caused a 36.8% surge in the company’s overall commercial deliveries. This, in turn, must have contributed to BCA’s revenues in the quarter under review.
The top-line estimate for Boeing’s commercial business segment is pegged at $7,238 million, implying a solid 73.9% improvement from the year-ago quarter’s reported figure.
Earnings Expectations
On the cost front, the delivery resumption of the 787 product line is likely to have boosted BCA’s operating profit, thereby adding impetus to its quarterly earnings.
Improvements in BCA’s financial performance owing to increasing 737 MAX and 787 deliveries and consistent cost management efforts by the BCA team is likely to have contributed to this unit’s first-quarter bottom-line growth.
Further, a steady improvement in the company’s expenses is likely to have taken place in relation to the storage of the 737 and 787 aircraft. This is because jets that were in the inventory are gradually getting delivered. Also, the return of the 737 Max in China might have benefited the BCA margin.
However, abnormal costs related to the 787 jets are likely to have some impact on Boeing’s first-quarter earnings.
So, the overall effect of the aforementioned factors on BCA’s first-quarter earnings performance seems to have been favorable.
The bottom-line estimate for BA’s commercial business segment is pegged at a loss of $526.7 million for the first quarter, indicating a solid improvement from the year-ago quarter’s reported loss of $859 million.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Boeing this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Boeing has an Earnings ESP of -7.50% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Below are three defense stocks that have the right combination of elements to come up with an earnings beat this reporting cycle:
Spirit AeroSystems SPR: The company is expected to release first-quarter results on May 3. SPR has an Earnings ESP of +16.58% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Spirit AeroSystems delivered a four-quarter average negative earnings surprise of 157.65%. The bottom-line estimate for SPR is pegged at a loss of 31 cents, indicating a deterioration from the prior-year quarter’s earnings of 3 cents per share.
Embraer ERJ: The company is scheduled to release first-quarter results on May 3. ERJ has an Earnings ESP of +116.67% and a Zacks Rank #3.
Embraer delivered a four-quarter average earnings surprise of 105.32%. The bottom-line estimate for ERJ is pegged at a loss of 3 cents per share, indicating an improvement from the year-ago quarter’s loss of 43 cents per share.
CAE Inc. CAE is expected to report first-quarter results soon. CAE has an Earnings ESP of +3.85% and a Zacks Rank #3.
CAE delivered a four-quarter average negative earnings surprise of 2.23%. The consensus estimate for CAE’s first-quarter earnings is pinned at 26 cents per share, indicating an improvement of 13% from the prior-year quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The Boeing Company (BA) : Free Stock Analysis Report
Embraer-Empresa Brasileira de Aeronautica (ERJ) : Free Stock Analysis Report
Spirit Aerosystems Holdings, Inc. (SPR) : Free Stock Analysis Report
CAE Inc (CAE) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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