Boeing is taking off after earnings, but analysts warn of turbulence ahead (BA)

pulse

April 25, 2018 2:45 PM

"The volatility in the shares is likely to continue in the near-term, as trade rhetoric intensifies," Credit Suisse said of Boeing earlier this week.

Volatility in the stock is likely to stick around, however, Credit Suisse warned.
Shares rose more than 2% following the earnings beat.

Shares of Boeing rose more than 2% in early trading Wednesday after the planemaker reported first quarter earnings that topped analysts' expectations and raised its forecasts.

The Everett, Washington-based company said it earned an adjusted $3.64 per share where analysts had expected $2.58, on revenues of $23.38 billion. Analysts had expected $22.23 billion.

Boeing sold a record 763 aircraft last year. Deliveries also rose in the first quarter, leading the company to up its full-year cash flow forecast to $15.0-$15.5 billion from $15 billion.

"Our team's strong first-quarter performance, combined with the positive market outlook across our businesses and our confidence in executing on our production and development programs, gives us a solid foundation to raise our guidance for the year," Dennis Muilenburg, CEO, said in a press release. "Going forward, we remain focused on our disciplined growth strategy, improved profitability and cash flow to ensure we meet our commitments to our customers and our shareholders."

Trade war fears had a slight impact on the stock earlier this year, keeping its price mostly flat since the end of January. However, those fears seem to have eased and the company's fundamentals remain strong, Credit Suisse told investors ahead of earnings.

"Boeing appears a natural casualty in a trade war, as one of the most visible American exporters, although we reiterate our view that most of the impact seems to be limited to the share price rather than the fundamentals (assuming no second-order effect of a deteriorating economic backdrop)," analyst Robert Spingarn said Monday.

"We think the volatility in the shares is likely to continue in the near-term, as trade rhetoric intensifies, potentially coupled with some growing pains with the ongoing production ramp."

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