Boeing's earnings report lifts shares off the runway, despite lower guidance

Posted Oct 24th 2007 9:06AM by Peter Cohan
Filed under: Earnings Reports, Press Releases, Boeing Co (BA)

Bloomberg News reports that Boeing Co. (NYSE: BA) beat and lowered. But the market is applauding -- lifting its shares 1.6% in pre-market action.

The market likes nothing more than a company that beats earnings estimates and raises its sales and profit guidance. But Boeing seems to have exceeded expectations while lowering guidance -- albeit less than expected. Boeing reported that its earnings rose 61% in the third quarter as it increased production to deliver nine more jetliners than a year earlier.

Its earnings and sales exceeded expectations. Net income increased to $1.11 billion, or $1.44 a share, from $694 million, or 89 cents, a year earlier. This was 18 cents a share about the $1.26 a share that 11 analysts surveyed by Bloomberg expected. Revenue of $16.5 billion exceeded the analysts' $16 billion forecast.

But Boeing's future is a bit darker. According to Reuters, it kept its 2008 profit forecast of $5.55 to $5.75 per share, below Wall Street's average estimate of $6.04, but lowered its revenue forecast to account for the six-month delay in 787 Dreamliner production, announced earlier this month. Boeing said it now expects 2008 revenue of $67.5 billion to $68.5 billion, down from its previous estimate of $71 billion to $72 billion. Analysts were expecting $71.2 billion, on average.

Since its shares are up in pre-market, it may be that the lowered revenue guidance was not as bad as analysts had been expecting.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Boeing securities.

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Tags: AIRBUS SAS, AirbusSas, BA, boeing, commercial aviation, CommercialAviation, dreamliner, inthenews, military contractors, MilitaryContractors

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Reader Comments (Page 1 of 1)

10-24-2007 @ 12:40PM

Theodosius said...

Good numbers, better than expected. As for the delivery delays, things should be OK. Airbus has delayed its new plane by a couple years, not 6 months like Boeing. Boeing management is more than experienced enough to know how to take advantage of this. http://www.newsvisual.com/newsvisual/2007/10/boeing-boeing-b.html