Earnings Preview: The Boeing Company

The Boeing Company (BA) is expected to report Q3 earnings before market open Wednesday, October 22, with a conference call scheduled for 10:30 am ET.

Guidance

Analysts are looking for EPS of 99c on revenue of $14.66B. The consensus range is 77c to $1.20 for EPS, and $14.11B to $15.53B for revenue, according to First Call. Boeing gave guidance for FY08 and FY09 EPS when it reported its Q2 earnings. The company expects FY08 EPS of $5.70 to $5.85 vs. consensus of $5.01, the company expects FY09 EPS of $6.80 to $7.00 vs. consensus of $6.67.

The company announced on September 7, mediated talks with the International Association of Machinists and Aerospace Workers concluded without reaching agreement on a new collective bargaining agreement. Boeing stated it does not intend to assemble airplanes during the strike.

Analyst Views

Jefferies estimates on September 8, that for each business day missed, the company will lose about $120M in revenues, and earnings could be hurt by about 1c per day. They also believe the greater the time delay, the greater the cost per day. The firm also points out that the last three strikes averaged 7 weeks and that Boeing's shares drifted on a relative basis until there were indications of a resolution. The firm maintained its Buy rating.

Bernstein and Argus both see limited long-term impact on the company's shares. Bernstein expects the union strike to be less than two months and maintained its Outperform rating and $83 target for the company. Argus thinks a month long strike could impact EPS by 40c, but believes a prolonged strike could push initial 787 deliveries into Q1 of 2010. The company's shares remain Buy rated.

Deutsche Bank lowered its Q3 and Q4 forecasts, on October 20, to reflect the ongoing strike and lowered its FY09 and FY10 forecasts to reflect the likely further slip to 787 as well as higher vendor financing. The firm maintained its Hold rating on the company's shares.

Comments

[PeteK:]

What BUY rating ? The way its going, Boeing may soon become another GM. Better sell before its too late. Don't say that the politicians did it when a big industry collapse, people do it to themselves.

2008 Oct 21 07:46 PM

[aeroinsider1:]

Boeing CEO W Jim McNerney has made clear his intention to stand fast at any cost to keep outsourcing language in the IAM contract strong. He clearly believes it will pay off in the long run. That's the operative term "long run". Boeing's announcement that they will return to the bargaining table 10/22 is only a smoke screen, damage control for what will be a disappointing earnings report 10/21. Don't be fooled, if you buy tomorrow the floor will drop out Thursday. Look for Boeing to drop into the 30's by late next week, then buy. Boeing's board members seem more than willing follow McNerney's lead. Their loss, our gain.

2008 Oct 21 11:43 PM

[Brian from ...:]

If Boeing strikers want more money they should buy Boeing stock when it's in the 40's, get back to work, work hard everyday, and sell when it hits 100. Win...Win...Win...situ...

2008 Oct 22 02:34 AM

[jerry F:]

It looks like there will be a settlement here. Enough damage has been done and both sides are prepared for a compromise. There are all sorts of claims about BA using this to catch up ...or the Union angry at the CEO's salary, but these are normal speculations and Labor contracts get settled at some point...and it appears this is the point. 50% of the strikers would prefer to come back to work

2008 Oct 22 09:16 AM