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Higher 737 Deliveries to Boost Boeing's (BA) Q1 Earnings

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Increased 737 delivery figures are expected to have boosted The Boeing Company’s BA commercial business in the first quarter. However, first-quarter 2022 results, scheduled for release on Apr 27, are projected to reflect mixed impacts on the bottom-line front.

Click here to know how the company’s overall Q1 performance is expected to have been.

Solid 737 Max Deliveries to Boost Growth

Thanks to steadily recovering air traffic, improved delivery figures for Boeing’s 737 jets, a trend we have been witnessing in the past couple of quarters, were observed in the first quarter of 2022. Notably, the aerospace giant delivered 86 737 jets in the soon-to-be-reported quarter, reflecting quite a solid improvement of 36.5% when compared with 63 units delivered in the year-ago quarter.

In fact, such significant delivery figures of 737 primarily drove a significant surge of 23.4% in the company’s overall commercial deliveries. This, in turn, must have contributed to Boeing Commercial Airplane (BCA) business segment revenues in the soon-to-be-reported quarter.

The Boeing Company Price and EPS Surprise

The Boeing Company Price and EPS Surprise
The Boeing Company Price and EPS Surprise

The Boeing Company price-eps-surprise | The Boeing Company Quote

However, the aerospace giant delivered none of its 787 Dreamliner jets in the first quarter of 2022, owing to production quality issues related to the program. This might have had partially impacted the top-line performance of the BCA segment.

Currently, the Zacks Consensus Estimate for Boeing’s commercial business segment’s revenues, pegged at $6,032 million, indicates a solid 41.3% improvement from the year-ago quarter’s reported figure.

Earnings Expectation

On the cost front, the financial impact of inspections, rework, temporary production rate adjustment, and delivery delays concerning the 787 performance issue are likely to have had an impact on BCA’s operating profit, thereby hurting its quarterly earnings. Also, abnormal costs related to this program might have weighed on this unit’s bottom line.

However, improvements in commercial airplanes' financial performance due to increasing 737 MAX deliveries and consistent efforts by the BCA team to manage costs through business transformation activities must have contributed toward this unit’s bottom-line growth in the first quarter.

Further, we expect to witness a steady improvement in the company’s expenses in relation to the storage of the 737 aircraft as jets stored so long in the inventory are gradually getting delivered.

So, the effect of the aforementioned factors on the overall first-quarter earnings performance of the BCA segment seems to have been mixed.

Currently, the Zacks Consensus Estimate for Boeing’s commercial business segment’s bottom line, pegged at a loss of $279 million, indicates an improvement from the year-ago quarter’s reported figure of loss of $856 million.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Boeing this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Boeing has an Earnings ESP of +1.72% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few defense companies that you may want to consider as these have the right combination of elements to post an earnings beat this season:

Northrop Grumman NOC has an Earnings ESP of +1.32% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northrop Grumman has a four-quarter average earnings surprise of 11.05%. The long-term earnings growth rate of NOC stands at 6.2%. The Zacks Consensus Estimate for Northrop’s first-quarter sales and earnings is pegged at $8.88 billion and $5.95 per share, respectively.

Spirit Aerosystems SPR has an Earnings ESP of +9.34% and a Zacks Rank #3. It has a four-quarter average negative earnings surprise of 14.56%.

The long-term earnings growth rate of SPR stands at 8.5%. The Zacks Consensus Estimate for Spirit Aerosystems’ first-quarter sales is pegged at $1.09 billion. The consensus estimate for the bottom line is pegged at 61 cents per share, respectively.

CAE CAE has an Earnings ESP of +11.11% and a Zacks Rank #3. CAE delivered a four-quarter average earnings surprise of 0.72%.

The long-term earnings growth rate of CAE is pegged at 8%. The Zacks Consensus Estimate for CAE’s first-quarter sales and earnings is pegged at $744.5 million and 18 cents per share, respectively.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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The Boeing Company (BA) : Free Stock Analysis Report

Northrop Grumman Corporation (NOC) : Free Stock Analysis Report

Spirit Aerosystems Holdings, Inc. (SPR) : Free Stock Analysis Report

CAE Inc (CAE) : Free Stock Analysis Report

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