Boeing (NYSE: BA), an aerospace entity whose colleagues include Northrop Grumman (NYSE: NOC) and Lockheed Martin (NYSE: LMT), had a very tough earnings report today. Reading about it is not for the shareholder who cannot stand even the smallest amount of pain. According to this Bloomberg article, Boeing missed estimates and posted a woeful loss because of delays for a couple of jet products.
Boeing lost $2.23 per share in the third quarter. The comparison is pretty tough, because in the similar quarter last year, the company earned 96 cents per share. Boeing was expected to lose somewhere around $2.12 per share, according to Earnings.com. Unfortunately, the guidance for the full fiscal year is pretty bad, too. What once was a range between $4.70 per share and $5.00 per share has now dropped to one with a low of $1.35 per share and a high of $1.55 per share.
Most companies saw sales weakness in January, and The Boeing Company (NYSE: BA) was no exception. As the global economic slowdown continues to drag out, the company saw sharp drops in order for both freight and passenger jets in the month.
The figures are pretty staggering. In January, the company only received order for 18 jetliners. When you compare this with January of last year, when the company had orders for 65 of its planes, you see a year over year decline of 72%.
Bank of America (NYSE: BAC) spokesman Scott Silvestri tells reporters that "As part of an ongoing cost reduction effort we have been scaling back on our use of corporate aircraft including selling three aircraft we own and the Merrill Lynch helicopter."
What a great deal: Taxpayers who are struggling to make mortgage payments fork over tens of billions of dollar to Bank of America, and we're supposed to be impressed by the fact that the company is "scaling back" on the use of corporate aircraft.
Boeing (NYSE: BA) Wednesday increased its 20-year forecast for global commercial jetliner deliveries for the sector by 2.8%, forecasting that demand for fuel-efficient replacement aircraft will outweigh capacity reductions by U.S. carriers.
Encompassing all airline manufacturers in the sector, Boeing now expects a market for 29,400 new commercial airplanes (passenger and freighter) by 2027, up 2.8% from its previous estimate of 28,600. Boeing added that the forecast factors-in the sector's near-term challenges, including a slowing global economy, surging fuel prices, slowing traffic growth in some markets, and a concerted action by airlines to lower costs.
Shares of Boeing (NYSE: BA) gained 25 cents to $66.18 on the news in Wednesday afternoon trading, despite a 131-point market sell-off in the DJIA.
Boeing added that single-aisle airplanes will make up the bulk of the sector's deliveries during the next 20 years. Strong domestic and intra-regional air travel growth in emerging Asia-Pacific markets, along with continued growth of low-cost carriers worldwide, is driving demand in this segment, the company said. Orders from Asia will comprise 31% of the deliveries; North America, 29%; and Europe/Asia, 27%.
It's a macroeconomic headwind that could produce a jetliner order headwind.
International Lease Finance Corp. said it may order 300 jetliners from Boeing and Airbus to meet lease demand from airlines that can no longer afford to buy their own planes, Bloomberg News reported Wednesday.
International Lease said it may purchase 150 single-aisle aircraft from each aerospace company. The orders would be worth about $22 billion at current plane prices, exclusive of discounts.
Boeing (NYSE: BA) shares fell $4.83 to $69.99 on the news, while Airbus's parent EADS' shares rose 39 euro cents to €12.95 in afternoon trading in Paris.
High oil prices take a toll
Stock analyst C. Leonard Bauer told BloggingStocks Wednesday the era's record-high jet fuel prices are beginning to take a toll on airline business models. "If high prices, basically oil above $120 a barrel, persist, you will see order cancellations, and more postponements, in the U.S. and abroad," Bauer said. "Some airline business models just won't work with oil at $120-$125 or higher, so you will begin to see order delays and cancellations." Bauer added that he does not have ratings on, nor own shares in any airline or airline manufacturer.
Readers of this space know that the investment bias is toward large-cap companies who have a competitive advantage in established markets, preferably with a favorable global trend as a support. With this in mind, Goodrich Corp. is worth a review.
Goodrich Corp. (NYSE: GR), formerly a tire maker (the company without the blimp), is now an aerospace services company, providing both parts and service for engines, airframes, electronic systems, and other aircraft systems.
Analysts see double-digit revenue growth for GR in 2008 and 2009, aided by favorable sector trends, including strong international, cyclical demand for jets and increased jet use, and an aging jet fleet in the U.S.
Further, GR is also using strong cash flow to expand maintenance, repair and overhaul facilities.
Boeing (NYSE: BA) also confirmed full-build 787 aircraft production plans. Earlier this year, Boeing delayed delivery of the 787 by six months to about December 2008, instead of May 2008, due to a parts shortage and also to complete additional work previously assigned to contractors, Bloomberg News reported. Boeing's shares were down 40 cents to $92.33 in Tuesday mid-day trading.
Boeing has 762 orders for the 787, valued at about $120 billion. Analysts view an aerospace company's ability to deliver planes on time as critical to the company's future prospects, due to the high cost airlines incur for delayed planes. Delayed plane deliveries also discourage future plane orders, analysts generally agree.
In addition to the 787's next-generation passenger amenities and substantially improved fuel efficiency, the plane also serves as a touch-point in the aerospace battle between Boeing and Airbus.
Boeing Co. (NYSE: BA) today obliterated Wall Street earnings estimates, reporting a second-quarter profit of $1.1 billion, or $1.35 per share, compared with a loss of $160 million, or 21 cents, a year earlier. Revenue skyrocketed 14% to $17 billion. Analysts had expected earnings of $1.16 and revenue of $16.2 billion, acccording to Thomson Financial. It also raised its 2007 outlook. For earnings release click here, AP story click here. and Bloomberg News story click here. Detailed post to follow later.
Boeing (NYSE: BA), an aerospace entity whose colleagues include Northrop Grumman (NYSE: NOC) and Lockheed Martin (NYSE: LMT), had a very tough earnings report today. Reading about it is not for the shareholder who cannot stand even the smallest amount of pain. According to this Bloomberg article, Boeing missed estimates and posted a woeful loss because of delays for a couple of jet products.
Most companies saw sales weakness in January, and 
Bank of America
Boeing announced Tuesday that it is still on track to fly its first 787 Dreamliner in Q1 2008 and 
Top growth fund manager sours on Apple, U.S. tech
New Facebook share structure hints at IPO
Before the bell: Futures higher ahead of housing, jobless data
