Boeing: A Few Thoughts On The Company's Upcoming Earnings

| About: The Boeing (BA)

Summary

Analysts expect BA to earn $2.01/share in terms of EPS when the company announces its Q2 results on July 23.

Recent trend behavior could improve well into the second-half of the year, if BA can meet and/or exceed analysts' earnings expectations for the upcoming quarter.

If BA can demonstrate increases in both 777-9 and 787-9 sales, then I strongly believe it should have no problem meeting and/or exceeding full-year EPS and revenue estimates.

As we find ourselves in the thick of earnings season, I think its best we look at some of the bigger more well-known names that actually pay their investors a pretty nice dividend. When I think of moderate-yielding, well-known companies, with earnings reports set to come out this week, one of the first names that pops into my head is Boeing (NYSE:BA).

Company Overview

Headquartered in Chicago, Illinois, and together with its subsidiaries, Boeing designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide. The company operates in a total of five segments which include Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support, and Boeing Capital.

Recent Trend Behavior

On Monday, shares of BA, which currently possess a market cap of $93.08 billion, a forward P/E ratio of 15.26, and a dividend yield of 2.29% ($2.92), settled at a price of $128.30/share. Based on a closing price of $128.30/share, shares of BA are trading 0.06% above their 20-day simple moving average, 2.33% below their 50-day simple moving average, and 0.73% below their 200-day simple moving average.

These numbers indicate a short-to-long term downtrend for the stock, which generally translates into a selling mode for most near-term traders and many long-term investors.

However, if the company can demonstrate a stronger-than-expected earnings performance when it announces Q2 results on July 23, there's a very good chance the company's trend behavior will reverse itself and begin to move in a very positive direction.

Upcoming Earnings Outlook

When it comes to the company's upcoming Q2 earnings, there are a number of things potential investors should consider.

For example, analysts are currently calling for BA to earn $2.01/share in terms of EPS (which is $0.25/share higher than what the company had reported during Q1 2014, and $0.34/share better than what the company had reported during the year-ago period) and $22.36 billion in terms of revenue when its latest earnings are released on July 22.

In order to meet and/or exceed its quarterly EPS estimates, I'd like to see a 3%-to-6% increase in the company's Q2 net profit (as compared to Q1's net profit of $965 million), a 3%-to-5% increase in operating profit (as compared to Q1's operating profit of $1.5 billion), a 3.5%-to-5.5% increase in the company's revenues (as compared to Q1's revenues of $20.46 billion).

Another Strong Showing At Farnborough Could Help Boost Long-Term Growth

Although Airbus (OTCPK:EADSY) out-dueled Boeing in terms of total orders at this year's Farnborough Airshow (Airbus: 496 aircraft valued at$75 billion vs. Boeing: 201 aircraft valued at $40.2 billion) , there were a number of orders that stood out as potential long-term growth catalysts. These orders included but were not limited to Qatar Airways' $19 billion dollar purchase of 50 Boeing 777-9 X planes (with the option to buy 50 more) and CIT Group's (NYSE:CIT) $2.5 billion dollar purchase of 10 additional 787-9 Dreamliners (bringing CIT's Dreamliner orders to a total of 20).

The continued uptrend in the sales of both the 777-9 X and 787-9 Dreamliner should play a role in helping Boeing meet and/or exceed its revised full-year core earnings per share of $7.15/share-to-$7.35/share.

Conclusion

For those of you who may be considering a position in Boeing, I'd actually look to keep a closer eye on the company's sales of its 777-9 X and 787-9 Dreamliner over the next 6-12 months as any uptrend in such sales could positively impact the company's long-term earnings growth.

In terms of the company's upcoming quarter, steady increases of at least 3% in both net profit and operating profit as well as a 3.5%-5.5% increase in the company's revenues could help BA stay on course to meet or even surpass analysts' expectations when it announces earnings on July 22.

Disclosure: The author has no positions in any stocks mentioned, but may initiate a long position in BA over the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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