Boeing (NYSE:BA) Shares Down 10.7% Following Weak Earnings

Key Points

• Boeing shares fell 10.7% after adjusted quarterly EPS of $(0.34) missed expectations of $(0.25), despite revenue of $24.19 billion exceeding estimates and rising 3.9% year over year.
• The company’s backlog reached a record $745 billion, while operating cash flow improved to $1.5 billion; however, the commercial-airplane unit posted a $697 million operating loss amid production and supply-chain costs.
• Boeing lowered its 737 MAX delivery outlook and now expects production to reach 52 aircraft per month only in the second half of next year, adding uncertainty to its turnaround and cash-generation plans.

The Boeing Company (NYSE:BA - Get Free Report) traded down 10.7% during mid-day trading on Tuesday after the company announced weaker than expected quarterly earnings. The company traded as low as $167.41 and last traded at $168.0870. Approximately 46,898,449 shares changed hands during trading, an increase of 569% from the average session volume of 7,010,134 shares. The stock had previously closed at $188.31.

The aircraft producer reported ($0.34) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.25) by ($0.09). The firm had revenue of $24.19 billion during the quarter, compared to analyst estimates of $23.95 billion. Boeing had a net margin of 2.41% and a negative return on equity of 346.82%. The business's quarterly revenue was up 3.9% compared to the same quarter last year. During the same period in the prior year, the company earned ($7.47) EPS.

Boeing News Summary

Here are the key news stories impacting Boeing this week:

• Positive Sentiment: Boeing reported $24.2 billion in third-quarter revenue, up about 4% year over year, while its net loss narrowed substantially from the prior-year period. Operating cash flow reached $1.5 billion and free cash flow was approximately $0.5 billion. Boeing Reports Third Quarter Results
• Positive Sentiment: Total backlog grew to a record $745 billion, including more than 6,300 commercial aircraft. Boeing also cited 737-7 and 737-10 certification milestones, a U.S. Navy F/A-XX fighter award and stronger defense and services performance. Boeing Reports Third-Quarter Results
• Neutral Sentiment: Management said financial uncertainty is narrowing and still expects to begin delivering 777-9 aircraft next year, but the recovery timeline depends on resolving production and supply-chain constraints. Boeing CEO Comments on Third-Quarter Results
• Negative Sentiment: Boeing cut its 737 MAX delivery target for the year and now expects production to reach 52 aircraft per month only in the second half of next year. The delay casts doubt on the timing of its turnaround and cash-generation plans. Boeing Cuts Delivery Target
• Negative Sentiment: The commercial-airplane division posted a $697 million operating loss, with margins pressured by higher production-related costs, supply-chain expenses and an unfavorable delivery mix. Adjusted loss per share of $0.34 missed analyst expectations. Boeing Jetliner Production Challenges

Analyst Upgrades and Downgrades

A number of brokerages have recently commented on BA. UBS Group reiterated a "buy" rating on shares of Boeing in a report on Tuesday, September 29th. DZ Bank restated a "buy" rating on shares of Boeing in a report on Thursday, August 6th. Barclays started coverage on Boeing in a research report on Friday, October 9th. They set an "overweight" rating and a $300.00 target price for the company. Bank of America reaffirmed a "buy" rating and set a $270.00 target price on shares of Boeing in a report on Friday, September 18th. Finally, Robert W. Baird set a $300.00 price target on Boeing and gave the company an "outperform" rating in a research report on Wednesday, July 29th. Two analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating, three have given a Hold rating and four have issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $266.96.

Institutional Trading of Boeing

Institutional investors have recently bought and sold shares of the company. Jupiter Topco LLC bought a new stake in shares of Boeing during the 2nd quarter valued at about $911,878,000. Bank of New York Mellon Corp acquired a new position in Boeing in the second quarter valued at approximately $747,763,000. Legal & General Group Plc acquired a new position in Boeing in the second quarter valued at approximately $710,816,000. Deutsche Bank AG bought a new position in shares of Boeing during the 2nd quarter worth approximately $539,456,000. Finally, Swiss National Bank boosted its holdings in shares of Boeing by 7.6% during the 1st quarter. Swiss National Bank now owns 2,298,077 shares of the aircraft producer's stock worth $457,386,000 after buying an additional 163,000 shares in the last quarter. Institutional investors own 64.82% of the company's stock.

Boeing Trading Down 10.7%

The company has a market cap of $132.85 billion, a price-to-earnings ratio of 72.77 and a beta of 1.26. The company has a current ratio of 1.14, a quick ratio of 0.33 and a debt-to-equity ratio of 6.77. The firm's 50-day moving average price is $201.13 and its 200 day moving average price is $218.67.

About Boeing

The Boeing Company NYSE: BA is a global aerospace company that designs, manufactures and supports commercial airplanes, military aircraft, satellites, space systems and related products and services. Its offerings serve airlines, government agencies, defense organizations and other customers worldwide.

Boeing operates through three principal business areas: Commercial Airplanes, which develops and produces passenger and cargo aircraft; Defense, Space & Security, which provides military aircraft, weapons systems, satellites and space-related platforms; and Global Services, which offers parts, maintenance, training, engineering and other lifecycle support.

Founded in 1916 by William Boeing, the company has grown into one of the world's major aerospace manufacturers.

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