Tuesday, January 25, 2011

Boeing Co. (NYSE: BA): Q4 Earnings Preview 2010

Boeing Co. (NYSE: BA) is scheduled to release its fourth-quarter earnings before the opening bell on Wednesday, January 26, 2011. Analysts, on average, expect the company to report earnings of $1.11 per share on revenue of $16.97 billion. In the year ago quarter, the company reported earnings of $1.77 per share on revenue of $17.94 billion.

The Boeing Company designs, develops, manufactures, sells, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide.

In the preceding third-quarter, the Chicago, Illinois-based company's net income was $837 million, or $1.12 a share, compared to a loss of $1.56 billion, or $2.23 a share, in the year-ago quarter. Revenue increased to $16.97 billion from $16.69 billion. Analysts, on average, expected the company to report earnings of $1.05 per share on revenue of $16.72 billion. 

At its last earnings call in October, the company raised its fiscal 2010 earnings guidance to a range of $3.80 to $4 a share, from a range of $3.50 to $3.80 a share. Revenue guidance was narrowed to between $64.5 billion and $65.5 billion, from its previous expectation in the range of $64 billion to $66 billion.

Boeing has a unique position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries, and one of the largest aerospace and defense contractors in the world. Also its revenues are spread across more than 90 countries around the globe.

The company recently announced that it surpassed its year end delivery target for 2010 by two airplanes. The company delivered 462 commercial airplanes in the fiscal year driven by 376 '737 Next Generation deliveries followed by 74 airplanes of 777 variants. The company ended the year with a strong backlog of 3,443 airplanes while net orders booked stood at 530 commercial airplanes. Citing a hike in demand, Boeing increased the production rate of Next-Generation 737 thrice in 2010. 

Recently, the aircraft maker said that it would aim to deliver its new 787 during the third quarter, clearing up doubts about the schedule after a November electrical fire on a test flight forced an emergency landing.  Boeing's most recent plan had called for a February delivery.  Boeing also said the delay will not hurt its 2010 financial results, although it didn't say what the 2011 impact will be. The news bolstered Boeing shares as the industry breathed a sigh of relief that the widely expected delay was not longer. The Dreamliner is already nearly three years behind its original schedule due to glitches in the supply chain and labour problems. Boeing currently has 847 orders for the Dreamliner, which promises a quieter and more comfortable ride for passengers.

However, Boeing faces stiff competition in the international commercial airlines market space from France-based Airbus. As of November 30, 2010, net orders received by Airbus stood at 388 airplanes, while 461 airplanes deliveries were made during the first eleven months of the year.

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