Investors appear to have reacted positively to Q4 results released today by Boeing Co (NYSE:BA). The company’s stock price is up 5% at the time of writing.
It was able to deliver record operating earnings of $3 billion, with operating cash flow of $2.9 billion in the final quarter of the year. Its GAAP EPS for Q4 was $5.18, with core EPS of $4.80 up on strong deliveries, performance and tax reform.
The figures include favorable tax reform of $1.74 per share. Excluding this, the company’s core EPS figure was $3.06, which is still ahead of investor expectations of $2.89.
In the 2017 financial year, Boeing’s operating cash flow of $13.3 billion was a record and it allowed the company to repurchase $9.2 billion of shares. Its revenue of $93.4 billion reflected an all-time high 763 commercial deliveries. Its backlog remains robust at $488 billion, which includes a record 5,864 commercial aircraft. Meanwhile, cash and marketable securities of $10 billion provides strong liquidity according to today’s investor update.
The company’s Q4 results also included guidance for 2018. The company is expected to increase operating cash flow to $15 billion. Its revenue guidance of between $96 billion and $98 billion reflects commercial deliveries of between 810 and 815. GAAP EPS for 2018 is expected to be between $15.90 and $16.10, with core EPS of between $13.80 and $14.00.
In my view, Boeing’s performance in Q4 and in 2017 was relatively impressive. The company seems to have a sound strategy that has been able to generate improved financial performance and is expected to lead to further growth in cash flow, revenue and profitability in 2018.
Therefore, I feel that today’s 5% stock price rise could continue in the medium term, with investor sentiment towards the aerospace and defense sector having the potential to improve over the coming months.