How Did Boeing Perform In Q1?

Boeing (NYSE:BA) posted stellar earnings to start the year off with a bang. The company managed to absolutely crush both the revenue and earnings consensus estimates by a significant margin. Revenue growth was boosted on strong performances across all divisions.

Given the way things are going, the airplane manufacturer decided to up its earnings guidance by close to 50 cents. It now expects the full year figure to lie somewhere between $16.40-$16.60 per share, while maintaining its revenue outlook at a range of $96-$98 billion. The company also raised its estimate for full-year operating cash flow to a range of $15-$15.5 billion. Previously, the company expected just about $15 billion in cash flow.

Post the call, Boeing’s shares jumped by a massive 14% to close at around $343. While this surge in the price is warranted, we believe the market is overvaluing the stock quite a bit. In this respect, we have created an interactive dashboard to best elaborate on our valuation method and reasoning. Please click on the link to change drivers and arrive at your own estimate.

• The company’s commercial airplanes division performed exceptionally well in the quarter, where sales jumped by almost 5% to $13.7 billion. The rise in sales is attributable primarily to the increase in the number of planes delivered in the quarter. The company managed to deliver a heavy 184 planes while taking in close to 221 net orders, and this seems to only be the beginning. According to the CEO, Dennis Muilenburg, the airplane manufacturer is on track to achieve its target of delivering over 900 planes by 2020. This announcement comes at the time when air traffic is increasing at a notable 6-7% a year, thereby pushing demand for commercial airliners sharply upward.
• At Defense, the company managed to see a near 13% jump in sales, in comparison to the same period last year. That said, its order backlog fell to about $50 billion, down from $63 billion a year ago. Through the quarter, the segment was able to procure a new contract from Kuwait for 28 F-18 fighter jets. Additionally, it was able to make some progress on its most troubled KC-46 program, while completing the first power-on test of its Starliner spacecraft that being built for NASA’s commercial crew program. In general, like many of its competitors, we expect sales at the division to benefit greatly from the increase in defense budgets the world over, and especially in the U.S.