Will F/A-18 Order Growth Boost Boeing's (BA) Q1 Earnings?
Zacks Investment Research | Apr 23, 2018 12:05AM ET
The Boeing Company’s (NYSE:BA) Defense, Space & Security segment has been witnessing solid demand for its varied product offerings. However, a dismal delivery figure for its defense equipments marred this healthy demand scenario. We expect Boeing’s first-quarter 2018 results, scheduled for release on Apr 25, to duly reflect these factors.
Key Catalysts
In the first quarter, Boeing’s defense business won a number of multi-billion-dollar contracts. Also, of late, management has been witnessing strong support for funding levels, above the President's budget request, for a number of its programs namely the F-18, CH-47 Chinook, Ground-Based Midcourse Defense, AH-64 Apache (NYSE:APA), the V-22 and the space launch system.
In sync with this, the company won quite a few contracts for its F/A-18 programs in the to-be-reported quarter. Such robust demand for its programs is likely to boost Boeing’s order growth and subsequently its defense backlog, which in turn, should boost the defense, space and security segment’s revenues in the quarter under review.
KC-46 Delivery- A Major Positive
The upcoming results are Iikely to reflect further progress in the company’s KC-46 tanker program. In 2011, the U.S. Air Force awarded Boeing a deal for designing, developing, manufacturing and delivering four next generation aerial refueling tankers – KC-46A. Also, the fourth quarter of 2017 witnessed Boeing’s first delivery contract of KC-46 international tanker to Japan.
With its management aimed at delivering first 18 tankers this year, we may expect the yet-to-be reported quarter’s results to reveal more updates on this program.
Deliveries – A Gloomy Picture
On Apr 10, 2018, Boeing announced first-quarter 2018 delivery figures that reflected a 40.5% decline in defense shipments compared with the previous year. Notably, the company’s defense deliveries totaled 25 in first-quarter 2018, down from 42 dispatched in the year-ago period. Total deliveries consisted of six AH-64 Apache helicopters (remanufactured) and eight Chinook helicopters (new and renewed). The company also delivered four P-8’s, five F/A-18s and two F-15s.
The Boeing Company Price and EPS Surprise
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