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The Boeing Company Message Board

  • thedeathrace thedeathrace Mar 5, 2013 3:21 PM Flag

    What will impact be on Boeing's earnings?

    I looked at the yahoo estimates on Boeing and I see no change at all in the analyst estimates. How can this be? Boeing is making zero deliveries of places right now. They yet to have any approval from the FAA or Japanese authorities on the new battery plan so that the new system can be tested in flight. All the existing fleet of planes have to be upgraded to the new battery solution (if it is approved). All the planes under construction need to be retrofitted also. I have no clue if there are any penalties to be paid to airlines for the disruptions and late deliveries. One would think that this has to be a huge hit to earnings this quarter. Lost revenues, huge extra costs, etc.

    And not to mention the large decline in defense work that is coming down the pike.

    Yet here we are with Boeing shares higher now than where they were when they announced the battery problem.

    I must be missing something, What is it?

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    • The market is always swinging to excesses. Boeing makes 3.9 Billion net, The cost of this fiasco has been estimated to be 350 Million per month. Even if they were to get back in the air next month that's a Billion $ haircut. If some of the more pesimistic timings of 6 to 9 more months are correct that could be 2 to 3 billion. So its not unreasonable that Boeing could have a big drop in eps this year, That's a 25 - 100% drop in EPS. I like to consider the upside and downside of a stock and frankly I see much more downside here. I guess it makes sense that BA is the most highly shorted stock in the DOW.

      Sentiment: Sell

    • The street seems to expect an acceptance (this week) of the proposal BA made to the FAA. The expenses can be offset by insurance and delivering larger (and more profitable) planes in March. Look for 767, 777, and 747 deliveries this month in addition to the 737's.

 
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