Boeing Q1 preview: Tweaks in production or financial targets would dictate sentiment
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Boeing (NYSE:BA) shares fell 0.69% on Tuesday, ahead of its first-quarter earnings on April 23rd, where investors would await any changes to the plane maker’s production or financial targets amid FAA scrutiny.
Boeing shares have lost over a third of their value since the start of the year, exhibiting the problems the company has endured since a door plug blew out on an Alaska Airlines flight in early January that led to the grounding of its 737 Max 9 aircraft.
Last month, Boeing said its first-quarter cash burn would be higher than expected, at $4 – $4.5 billion. The company added that the production of its best-selling 737 Max jetliner would be capped at fewer than 38 a month.
BA’s 1Q FCF preannouncement means the company will need to make significant deliveries for the rest of the year to hit its positive low single-digit free cash flow target for 2024, said Susquehanna.
Any additional details provided by management during the call regarding the plan to hit this target will likely be well-received, the brokerage added.
“We don’t see a positive catalyst coming with Q1 results, with the CEO soon to leave the company and BA still to respond to FAA’s request for quality upgrades. Call likely is frustrating, similar to Q4’23, with BA unable to comment on when MAX production can rise, if it will buy SPR or divest defense businesses,” said analysts at Wells Fargo.
Additionally, Barclays expects that BA would cut its forecast for positive FCF in 2024 on its Q1 call and now estimated break-even FCF for 2024, which would improve to $5-6B in 2025 and $6-7B in 2026.
On average, Wall Street expects BA to post a quarterly EPS of -$1.43 (-12.6% Y/Y) on revenue of $17.22B (-3.8% Y/Y).
Over the last two years, BA has beaten EPS estimates 25% of the time and has beaten revenue estimates 38% of the time.
Over the last three months, EPS estimates have seen zero upward revisions and 13 downward. Revenue estimates have seen one upward revision and 12 downward.
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