Boeing Co. (BA, Financial) said revenues increased 2% year over year, driven by a record 202 commercial aircraft deliveries during the three months ended Sept. 30.
The Chicago-based airplane manufacturer reported revenues of $24.3 billion and earnings per share of $3.06, both outperforming analyst expectations for the quarter.
Brief summary of earnings
Boeing CEO Dennis Muilenburg praised the team for “driving execution with a focus on both productivity and growth” across the company’s three business segments: commercial airplanes, defense and security and global services.
Boeing’s commercial airplanes segment generated a 9.9% operating margin during the quarter, up 1.4% from the profit margin in third-quarter 2016. Higher margins on the 787 Dreamliner and strong operating performance programs contributed to the increase.
Muilenburg highlighted several achievements in the earnings call, including higher production rates for both the 737 and the 787. The company expects to increase the production rate to 57 737s and 14 787s per month by 2019. Additionally, the commercial airplanes backlog remains robust with approximately 5,700 airplanes.
Company reports good growth outlook across all three business segments
Boeing Chief Financial Officer Greg Smith increased the company’s full-year earnings guidance as it reported strong third-quarter earnings performance. The company expects earnings between $11.20 and $11.40 per share and operating cash flow of $12.50, up 10 cents and 25 cents from the prior quarter’s guidance. The increased guidance reflects several growth opportunities in the commercial airplanes and global services business segments, potentially resulting in long-term top-line and bottom-line growth.
The company expects to achieve operating margins of at least 9% in each of its business segments for the full year. Boeing’s operating margin of 9.93% is near a 10-year high and outperforms 74% of global competitors. As the company also has strong returns on equity, GuruFocus ranked Boeing’s profitability 8 out of 10.
See also
Boeing’s Piotroski F-score currently ranks 7, driven by increasing returns on assets, asset turnover and gross margins.
GuruFocus added a new “Piotroski F-score details” section on a company’s summary page. This section details the components of Joseph Piotroski’s financial strength metric, which includes criteria like positive net income, increasing returns on assets and lower leverage. You will see this section in the rightmost column, under the “Analyst Estimate” section.
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