A month has gone by since the last earnings report for Boeing (BA). Shares have lost about 7.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Boeing due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Boeing Q3 Earnings Lag Estimates, Revenues Decrease Y/Y
The Boeing Company incurred an adjusted loss of $10.44 per share in the third quarter of 2024, wider than the Zacks Consensus Estimate of a loss of $10.34. The bottom line deteriorated from the year-ago quarter’s reported loss of $3.26 per share.
Including one-time items, the company reported a GAAP loss of $9.97 per share, wider than the year-ago quarter’s reported loss of $2.70.
The year-over-year deterioration can be attributed to the adverse impacts of the International Association of Machinists and Aerospace Workers (IAM) work stoppage and previously announced charges on commercial and defense programs.
Revenues
Revenues amounted to $17.84 billion, which decreased 1% from the year-ago reported figure of $18.10 billion.
The year-over-year deterioration was due to dismal performance by the Commercial Airplanes segment.
Total Backlog
Backlog at the end of the third quarter of 2024 totaled $510.51 billion, down from $515.87 billion recorded at the end of the second quarter.
Segmental Performances
Commercial Airplane: Revenues in this segment declined 5% year over year to $7.44 billion, reflecting the impact of the IAM work stoppage. The segment incurred an operating loss of $4.02 billion, indicating a deterioration from the year-ago quarter’s reported operating loss of $0.68 billion. This was due to pre-tax charges of $3 billion from the 777X and 767 programs as well as higher period expenses.
During the quarter under review, Boeing delivered 116 commercial planes. The figure rose 10% year over year.
The backlog for this segment remained healthy, with more than 5,400 airplanes valued at $428 billion.
Boeing Defense, Space & Security (“BDS”): The segment recorded revenues of $5.54 billion, indicating a year-over-year rise of 1%. It incurred an operating loss of $2.38 billion, implying a deterioration from the year-ago quarter’s operating loss of $0.92 billion. This deterioration was due to pre-tax charges of $2 billion from the T-7A, KC-46A Tanker, Commercial Crew, and MQ-25 programs.
BDS recorded a backlog of $62 billion, 28% of which comprised orders from international clients.
Global Services: Revenues in this segment improved 2% year over year to $4.90 billion, driven by higher commercial volume. This unit generated an operating income of $834 million, which improved from $784 million in the prior-year quarter.
Financial Condition
Boeing exited third-quarter 2024 with cash and cash equivalents of $9.96 billion, and short-term and other investments of $0.51 billion. At the end of 2023, the company had cash and cash equivalents of $12.69 billion, and short-term and other investments worth $3.27 billion.
Long-term debt amounted to $53.18 billion, up from $47.10 billion recorded at the end of 2023.
The company’s operating cash outflow as of Sept. 30, 2024, was $8.63 billion against operating cash inflow of $2.58 billion as of Sept. 30, 2023.
Free cash outflow totaled $10.21 billion at the end of third-quarter 2024 against free cash inflow of $1.48 billion at the end of third-quarter 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -11.86% due to these changes.
VGM Scores
Currently, Boeing has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Boeing has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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