Boeing Co (BA) Reports Strong Third-Quarter Results; Raises Revenue, EPS and Cash Flow Guidance

Boeing Co (NYSE:BA) reported third-quarter revenue increased 9 percent to $25.8 billion on record commercial deliveries (Table 1). Core earnings per share (non-GAAP) for the quarter increased 18 percent* to $2.52, reflecting strong performance across the company, and GAAP earnings per share was $2.47.

Core earnings per share (non-GAAP)* guidance for 2015 increased to between $7.95 and $8.15, from $7.70 and $7.90 on continued strong operating performance. GAAP earnings per share guidance for 2015 increased to between $7.65 and $7.85, from $7.60 and $7.80. Operating cash flow guidance increased to approximately $9.5 billion. Revenue guidance increased $0.5 billion to between$95.0 billion and $97.0 billion on higher commercial airplane deliveries. Defense, Space & Security operating margin guidance increased to approximately 10 percent.

“By continuing to profitably deliver on our large and diverse backlog, we are driving strong growth in revenue, earnings and cash flow,” said Boeing President and Chief Executive Officer Dennis Muilenburg. “Solid operating performance across our commercial and defense businesses during the quarter also supported our continued investment in innovation and our people, and our commitment to return cash to shareholders.”

“Three quarters of solid results and confidence in our continued operating performance enabled us to raise our revenue, earnings per share and operating cash flow guidance for the year. Looking ahead, our teams remain focused on improving productivity and quality and delivering improved capabilities to meet our customers’ expectations.”

Operating cash flow in the quarter was $2.9 billion, reflecting commercial airplane production rates and strong operating performance. During the quarter, the company repurchased 11 million shares for $1.5 billion, leaving $6.0 billion remaining under the current repurchase authorization. Year to date, the company repurchased 41 million shares for $6.0 billion. The company also paid$0.6 billion in dividends in the quarter, reflecting an approximately 25 percent increase in dividends per share compared to the same period of the prior year.

Commercial Airplanes third-quarter revenue increased 10 percent to $17.7 billion on higher delivery volume and mix (Table 4). Third-quarter operating margin was 10 percent, reflecting higher R&D and the dilutive impact of higher 787 deliveries partially offset by strong performance on production programs.

During the quarter, the company began final assembly and achieved power-on of the first 737 MAX airplane. In total, the 737 program has won nearly 2,900 firm orders for the 737 MAX since launch. Also during the quarter, the company completed firm configuration for the 777X. The 777X program is on schedule for first delivery in 2020.

Commercial Airplanes booked 166 net orders during the quarter. Backlog remains strong with nearly 5,700 airplanes valued at $426 billion.

Defense, Space & Security’s third-quarter revenue was $8.4 billion with an operating margin of 12.2 percent (Table 5).

Boeing Military Aircraft (BMA) third-quarter revenue increased 15 percent to $4.1 billion primarily as a result of F-15 contract negotiations and BMA operating margin was 12.2 percent. During the quarter, BMA was awarded contracts for 13 P-8A Poseidon aircraft, 22 Apache helicopters, and 15 Chinook helicopters. Also during the quarter, the company and the U.S. Air Force team completed the first flight of a KC-46A tanker aircraft.

Network & Space Systems (N&SS) third-quarter revenue was $2.1 billion, reflecting higher volume on the Commercial Crew program. Operating margin increased to 11.5 percent, reflecting favorable program mix. During the quarter, NASA extended Boeing’s international space station contract.

Global Services & Support (GS&S) third-quarter revenue decreased to $2.2 billion, reflecting the timing of Airborne Early Warning and Control deliveries. Operating margin increased to 12.9 percent on strong performance. During the quarter, GS&S was awarded a contract to develop and provide the next-generation communications system for the Australian Defence Force.

Backlog at Defense, Space & Security was $59 billion, of which 40 percent represents orders from international customers. (Original Source)

Shares of Boeing Company closed yesterday at $138.88. BA has a 1-year high of $158.83 and a 1-year low of $115.14. The stock’s 50-day moving average is $134.30 and its 200-day moving average is $140.88.

On the ratings front, Boeing has been the subject of a number of recent research reports. In a report issued on October 15, Jefferies Co. analyst Howard Rubel maintained a Buy rating on BA, with a price target of $185, which represents a potential upside of 33.2% from where the stock is currently trading. Separately, on October 14, Canaccord Genuity’s Kenneth Herbert reiterated a Buy rating on the stock and has a price target of $165.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Howard Rubel and Kenneth Herbert have a total average return of 18.6% and 0.6% respectively. Rubel has a success rate of 74.4% and is ranked #72 out of 3795 analysts, while Herbert has a success rate of 38.0% and is ranked #2032.

Overall, one research analyst has assigned a Hold rating and 7 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $174.43 which is 25.6% above where the stock closed yesterday.

Boeing Co, together with its subsidiaries designs, develops, manufactures, sells and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services.


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