What to Look For From BA


Key Takeaways

  • Analysts estimate adjusted EPS of -$0.45 vs. -$1.53 in Q1 FY 2021.
  • Commercial airplane deliveries, already announced, rose YOY but missed analyst estimates.
  • Revenue is expected to rise modestly as commercial aircraft demand recovers from the economic shock triggered by the COVID-19 pandemic.

The Boeing Co. (BA) posted a modest rebound in annual revenue in 2021 after two straight years of precipitous declines. Despite that improvement, Boeing posted a $4.2 billion net loss, a sign that the company has yet to fully recover from the impact of the COVID-19 pandemic and major problems triggered by the 737 MAX jetliner and 787 Dreamliner. Boeing is likely to benefit this year as commercial airline travel picks up and as the 737 MAX continues its return to service.

Investors will be watching how these various forces are impacting Boeing’s financial recovery when the company reports earnings on April 27, 2022 for Q1 FY 2022. Analysts expect Boeing’s adjusted loss per share to narrow considerably as revenue rises at a modest pace.

Investors also will focus on Boeing’s commercial airplane deliveries, a key metric that measures the level of demand for one of the company’s main products. Boeing announced its commercial airplane deliveries earlier this month. Deliveries for commercial aircraft rose compared to the year-ago quarter, but came in below analysts’ estimates.

Shares of Boeing have underperformed the broader market over the past year. The stock had a few brief periods of outperformance in the early part of the past year, but has lagged since late June 2021. Its underperformance gap with the market has significantly widened during that period. Boeing’s shares have provided a total return of -27.1% over the past 12 months, well below the S&P 500’s total return of 2.0%.

Source: TradingView.

Boeing Earnings History

Boeing reported Q4 FY 2021 earnings that missed analysts’ expectations. The company reported an adjusted loss per share that was about half the size of the adjusted loss per share recorded in the year-ago quarter. Revenue fell 3.3% year over year (YOY), the first decline since the first quarter of FY 2021. The company said that revenue during the quarter reflected higher volumes in its commercial aircraft business but lower revenue from its defense business.

In Q3 FY 2021, Boeing reported earnings and revenue that missed consensus estimates. The company reported its seventh quarterly adjusted loss per share in eight quarters. Revenue rose 8.1% YOY, marking the second straight quarter of revenue growth after a long string of consecutive quarterly declines. The company said that revenue for the quarter was driven by higher commercial airplanes and services volume.

Analysts expect Boeing’s losses to continue. In Q1 FY 2022, they estimate that the company will report its third straight adjusted loss per share, although it is expected to be nearly three-and-a-half times smaller than in the year-ago quarter. Revenue is expected to grow 5.7% YOY, a turnaround from the previous quarter’s decline. For full-year FY 2022, analysts expect Boeing to report its first positive annual adjusted earnings per share (EPS) since FY 2018. Annual Revenue is forecast to climb 29.0%, which would be its fastest pace in at least five years.

Boeing Key Stats
  Estimate Q1 FY 2022 Q1 FY 2021 Q1 FY 2020
Adjusted Earnings Per Share ($) -0.45 -1.53 -1.70
Revenue ($B) 16.1 15.2 16.9
Commercial Airplane Deliveries 95 (actual) 77 50

Source: Visible Alpha; Boeing.

The Key Metric

As mentioned above, Boeing’s commercial airplane deliveries are also a key metric watched by investors. Boeing manufactures both commercial and military aircraft. Demand for the former type is much more sensitive to economic conditions, and thus much more volatile. Demand for the latter depends on government policy decisions regarding its military program, making it a much more stable source of demand. Demand for Boeing’s commercial airplanes has been devastated in recent years by the pandemic’s impact on the airline industry. Furthermore, issues with some of the company’s key aircraft, including the grounding of the 737 MAX and subsequent electrical issues, have also impacted demand. The 737 MAX has been cleared for flight in the U.S. and continues to make its global return to service. Deliveries of Boeing’s 787 Dreamliner have been halted and are likely to remain frozen until the second half of the year, when it is expected to get approval from the Federal Aviation Administration (FAA).

In FY 2018, Boeing delivered a total of 806 commercial aircraft, up 5.6% from the previous year. But in FY 2019, which was impacted by the grounding of the 737 MAX, the company’s commercial airplane deliveries fell 52.9%. Then in the following year, FY 2020, deliveries sank another 58.7% amid the collapse in demand triggered by the pandemic. Deliveries began to bounce back in FY 2021, rising 116.6% from extremely depressed levels. The second quarter of FY 2021 was especially strong, with Boeing’s commercial airplane deliveries up 295.0% YOY. Growth slowed to 203.6% YOY in the third quarter and then to 67.8% YOY in the fourth. The pace of growth decelerated to a pace of 23.4% YOY in Q1 FY 2022. For full-year FY 2022, analysts are currently forecasting commercial airplane deliveries to rise 75.6% to a total of 597, the highest level in several years. However, that number is still well below the level reached in FY 2018, before the troubles with the 737 MAX and the 787 Dreamliner as well as the pandemic.



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