After the market closed on Monday, IBM Inc. (IBM) reported second quarter results that were above consensus expectations. This was not a huge surprise since IBM has a strong earnings history and delivered stellar first-quarter numbers as well. The strong financial results for the first half of 2011 led IBM to raise guidance for the second half of the year. That sent IBM shares up over 5 percent to a new 52-week high.
We could see that scene repeated next week when Boeing (BA) reports second- quarter results.
Last quarter, Boeing reported earnings that were 11 percent above consensus expectations. Like IBM, Boeing has an impressive track record of consistently beating earnings expectations. Wall Street is expecting earnings to decline by over 10 percent in the second quarter. Those estimates will almost certainly prove conservative and Boeing will deliver another quarterly earnings beat.
Boeing did not raise full year guidance last quarter despite the blowout numbers. Another strong earnings performance will in all likelihood lead management to raise the full year forecast. The combination of the earnings beat along with the guidance increase could send Boeing’s stock price up 5 percent (near their 52-week).
The aerospace sector is ramping up for what should be a multi-year production cycle as airlines modernize their aging fleets. That makes Boeing positioned to be one of the top performing blue chip stocks over the next few years.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
