The Boeing Company (BA) is scheduled to report its third quarter results on Wednesday, October 21, 2009. In the previous quarter ending June 2009, the company's actual earnings exceeded the market's consensus by 16.92%. However, for the quarter ending September 2009 (Q3), the company is likely to disappoint investors with earnings losses.
Analysts estimates for the quarter ending September 2009 (Q3) range from a low of $-2.45 to a high of $-1.87, with a consensus of $-2.119. For the fiscal quarter ending September 2009, the consensus EPS forecast has decreased over the past week from $-2.102 to $-2.119 (-0.81%) and decreased over the past month from $-1.049 to $-2.119 (-102.00%). Of the 15 analysts making quarterly forecasts, none raised and 16 lowered their forecast. For the last four years, the company's third quarter revenue has been trending down the second quarter earnings. I see no reason why the trend shouldn't continue in Q3-2009.
The Boeing Company announced that it will record a $1 billion charge in the third quarter of fiscal 2009. The company attributed the charge from a delay in producing a new version of the 747-8 series freighter jet, leading to slow sales and late design changes.
President Barack Obama has said the United States will scrap a $5 billion missile defense system in Eastern Europe, which Boeing was set to build. And the U.S. Army's Future Combat Systems program, which Boeing leads, is also facing cuts. In order to, at least partially, offset these shortfalls, Boeing is planning to tap the potentially $20 billion smart grid market. Boeing is already a partner in smart grid projects being proposed by Southern California Edison and Consolidated Edison in New York, both of which are seeking funding from the Department of Energy's $3.9 billion smart grid stimulus grant program
Looking ahead, for the fiscal year ending December 2009, the consensus EPS forecast has increased over the past week from $1.501 to $1.536 (2.33%) and decreased over the past month from $2.432 to $1.536 (-36.84%). Of the 17 analysts making yearly forecasts, 1 raised and 19 lowered their forecast.
The stock fell, rose and then fell in the first half of 2009 but has since been on a fairly steady climb recovering from any short term drops with high velocity moves to the upside. It peaked on 9/29 at $54.62 has moved sideways a bit and closed last night at $53.45, compared to the 52 week range of $29.05 and $55.48. The stock seems to be overvalued at the current levels.
