We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Higher 737 Deliveries Aid Boeing (BA) in Q4 Earnings?
Read MoreHide Full Article
Increased 737 delivery figures are expected to have boosted The Boeing Company’s (BA - Free Report) commercial business in the fourth quarter. However, fourth-quarter 2021 results, scheduled for release on Jan 26, are projected to reflect mixed impacts on the bottom-line front.
Click here to know how the company’s overall Q4 performance is expected to have been.
Solid 737 Max Deliveries to Boost Growth
Improved delivery figures for Boeing’s 737 jets, a trend we have been witnessing in the past couple of quarters, were observed in the fourth quarter of 2021 as well. Notably, the aerospace giant delivered 84 737 jets in the fourth quarter of 2021, reflecting quite a solid improvement of 171% when compared with 31 units delivered in the year-ago quarter.
In fact, such significant delivery figures of 737 primarily drove a significant surge of 67.8% in the company’s overall commercial deliveries. This, in turn, must have contributed favorably to revenues for Boeing Commercial Airplane (BCA) business segment in the soon-to-be-reported quarter.
However, lower 787 deliveries might have partially impacted the top-line performance of the BCA segment.
Currently, the Zacks Consensus Estimate for Boeing’s commercial business segment’s revenues, pegged at $6,742 million, indicates a solid 42.3% improvement from the year-ago quarter’s reported figure.
Earnings Expectation
On the cost front, during the third quarter of 2021, Boeing increased its production rate for 737 jets driven by strong demand for this aircraft witnessed in recent times. This might have pushed up the cost of revenues, thereby weighing on the BCA unit’s bottom-line performance in the fourth quarter.
Moreover, concerning the 787-performance issue, the financial impact of inspections, rework, temporary production rate adjustment, and delivery delays are likely to have had an impact on BCA’s quarterly earnings. Also, abnormal costs related to this program might have weighed on this unit’s bottom line.
However, abnormal production cost related to 737 program has been declining, which in turn must have contributed favorably to its fourth-quarter earnings.
Also, improvements in commercial airplanes' financial performance due to increasing 737 MAX deliveries and consistent efforts by the BCA team to manage costs through business transformation activities must have contributed toward this unit’s bottom-line growth. Further, we expect to witness an improvement in the company’s expenses in relation to storage of the 737 aircraft as jets those were stored so long in the inventory are gradually getting delivered.
So, the effect of the aforementioned factors on the overall earnings performance of the BCA segment seems to have been mixed.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Boeing this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Boeing has an Earnings ESP of -37.78% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few defense companies you may want to consider, as these have the right combination of elements to post an earnings beat this season:
Aerojet Rocketdyne has an Earnings ESP of +2.00% and a Zacks Rank #2. AJRD has a four-quarter average negative earnings surprise of 2.17%.
The Zacks Consensus Estimate for Aerojet’s fourth-quarter earnings is pegged at 50 cents per share, implying an improvement of 16.3% from the prior-year quarter’s reported figure. Its fourth-quarter revenue estimate, pegged at $578.5 million, suggests an improvement of 3.9% from the last year’s reported figure.
TGI delivered a four-quarter average earnings surprise of 101.89%. The Zacks Consensus Estimate for Triumph Group’s fourth-quarter earnings, pegged at 20 cents, has deteriorated 9.1% over the past 30 days. TGI boasts a long-term earnings growth rate of 2.6%.
Embraer (ERJ - Free Report) has an Earnings ESP of +17.65% and a Zacks Rank #3. ERJ delivered a four-quarter average earnings surprise of 42.21%.
The Zacks Consensus Estimate for Embraer’s fourth-quarter earnings, pegged at 9 cents, has moved up 28.6% over the past 30 days. TXT boasts a long-term earnings growth rate of 17%.
Image: Shutterstock
Will Higher 737 Deliveries Aid Boeing (BA) in Q4 Earnings?
Increased 737 delivery figures are expected to have boosted The Boeing Company’s (BA - Free Report) commercial business in the fourth quarter. However, fourth-quarter 2021 results, scheduled for release on Jan 26, are projected to reflect mixed impacts on the bottom-line front.
Click here to know how the company’s overall Q4 performance is expected to have been.
Solid 737 Max Deliveries to Boost Growth
Improved delivery figures for Boeing’s 737 jets, a trend we have been witnessing in the past couple of quarters, were observed in the fourth quarter of 2021 as well. Notably, the aerospace giant delivered 84 737 jets in the fourth quarter of 2021, reflecting quite a solid improvement of 171% when compared with 31 units delivered in the year-ago quarter.
In fact, such significant delivery figures of 737 primarily drove a significant surge of 67.8% in the company’s overall commercial deliveries. This, in turn, must have contributed favorably to revenues for Boeing Commercial Airplane (BCA) business segment in the soon-to-be-reported quarter.
The Boeing Company Price and EPS Surprise
The Boeing Company price-eps-surprise | The Boeing Company Quote
However, lower 787 deliveries might have partially impacted the top-line performance of the BCA segment.
Currently, the Zacks Consensus Estimate for Boeing’s commercial business segment’s revenues, pegged at $6,742 million, indicates a solid 42.3% improvement from the year-ago quarter’s reported figure.
Earnings Expectation
On the cost front, during the third quarter of 2021, Boeing increased its production rate for 737 jets driven by strong demand for this aircraft witnessed in recent times. This might have pushed up the cost of revenues, thereby weighing on the BCA unit’s bottom-line performance in the fourth quarter.
Moreover, concerning the 787-performance issue, the financial impact of inspections, rework, temporary production rate adjustment, and delivery delays are likely to have had an impact on BCA’s quarterly earnings. Also, abnormal costs related to this program might have weighed on this unit’s bottom line.
However, abnormal production cost related to 737 program has been declining, which in turn must have contributed favorably to its fourth-quarter earnings.
Also, improvements in commercial airplanes' financial performance due to increasing 737 MAX deliveries and consistent efforts by the BCA team to manage costs through business transformation activities must have contributed toward this unit’s bottom-line growth. Further, we expect to witness an improvement in the company’s expenses in relation to storage of the 737 aircraft as jets those were stored so long in the inventory are gradually getting delivered.
So, the effect of the aforementioned factors on the overall earnings performance of the BCA segment seems to have been mixed.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Boeing this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Boeing has an Earnings ESP of -37.78% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few defense companies you may want to consider, as these have the right combination of elements to post an earnings beat this season:
Aerojet Rocketdyne has an Earnings ESP of +2.00% and a Zacks Rank #2. AJRD has a four-quarter average negative earnings surprise of 2.17%.
The Zacks Consensus Estimate for Aerojet’s fourth-quarter earnings is pegged at 50 cents per share, implying an improvement of 16.3% from the prior-year quarter’s reported figure. Its fourth-quarter revenue estimate, pegged at $578.5 million, suggests an improvement of 3.9% from the last year’s reported figure.
Triumph Group (TGI - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
TGI delivered a four-quarter average earnings surprise of 101.89%. The Zacks Consensus Estimate for Triumph Group’s fourth-quarter earnings, pegged at 20 cents, has deteriorated 9.1% over the past 30 days. TGI boasts a long-term earnings growth rate of 2.6%.
Embraer (ERJ - Free Report) has an Earnings ESP of +17.65% and a Zacks Rank #3. ERJ delivered a four-quarter average earnings surprise of 42.21%.
The Zacks Consensus Estimate for Embraer’s fourth-quarter earnings, pegged at 9 cents, has moved up 28.6% over the past 30 days. TXT boasts a long-term earnings growth rate of 17%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.