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Why Boeing (BA) Stock Is Up Today

Stocks in this article: BA

NEW YORK (TheStreet) -- Boeing  (BA) rose Wednesday after the world's largest plane manufacturer reported first-quarter earnings that surpassed analysts' expectations and increased its fiscal year guidance.

Boeing's adjusted net profit rose to $1.76 a share from $1.73 a share in the same period one year earlier, but the increase totaled 14% after the exclusion of a one-time gain of 19 cents a share for a research and development tax credit booked in 2013. This handily beat the expectation of $1.56 a share from analysts polled by Thomson Reuters I/B/E/S.

Non-adjusted profit declined 13% year over year to $965 million, or $1.28 a share, from $1.11 billion, or $1.44 a share. Revenue rose 8% year over year to $20.47 billion from $18.89 billion.

Commercial airplane deliveries rose 18% to 161 from 137 thanks to an increase in production rates for the company's best-selling 737 jetliner and 787 Dreamliner. This figure also beat some analysts' expectations. 

Boeing increased its core earnings forecast to a range of $7.15 a share to $7.35 a share, up from its previous forecast of $7.00 a share to $7.20 a share.

The stock was up 2.11% to $130.24 at 9:56 a.m. on Wednesday.

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Separately, TheStreet Ratings team rates BOEING CO as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate BOEING CO (BA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 6.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BOEING CO has improved earnings per share by 25.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, BOEING CO increased its bottom line by earning $5.97 versus $5.12 in the prior year. This year, the market expects an improvement in earnings ($7.38 versus $5.97).
  • The net income growth from the same quarter one year ago has exceeded that of the Aerospace & Defense industry average, but is less than that of the S&P 500. The net income increased by 26.1% when compared to the same quarter one year prior, rising from $978.00 million to $1,233.00 million.
  • Powered by its strong earnings growth of 25.78% and other important driving factors, this stock has surged by 45.05% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.43 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • You can view the full analysis from the report here: BA Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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