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Tickers in this Article: BA
Analysts are expecting a drop in profit for Boeing (NYSE:BA) when it reports its results for the third quarter on Wednesday, October 24, 2012. The company reported profit of $1.46 a year ago, but the current consensus estimate anticipates earnings per share of $1.12.

Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: 12 Things You Need To Know About Financial Statements

What to Expect: Analysts are expecting Boeing to announce earnings of $1.12 per share, 23.3% less than a year ago, when the company reported earnings of $1.46 per share.

The figure has risen from $1.09 over the past three months. For the fiscal year, analysts are expecting earnings of $4.71 per share.

Boeing is expected to beat last year's reported revenue of $17.73 billion and come in at $20.03 billion for the quarter. For the fiscal year, expected revenue is $80.64 billion.

Company Performance: Boeing has reported revenue increases for the past four quarters. It increased 20.9% to $20 billion in the second quarter. Prior to that, the figure rose 30% in the first quarter, 18.2% in the fourth quarter of the last fiscal year and 4.5% in the third quarter of the last fiscal year.

BA has a P/E ratio of 12.8, in line with the industry average. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Find P/E And PEG Ratios

Over the past quarter, the stock price has increased from $72.91 on July 23, 2012 to $74.26. Boeing's stock price is currently on the rise. Since October 10, 2012 business days the stock has risen $3.92 per share.

The Competition: Boeing is an aerospace firm that designs, develops, manufactures, sells, and supports commercial jetliners, military aircraft, satellites, missile defense, and human space flight services. The company's closest competitor in the aerospace and defense industry, Lockheed Martin (LMT), will report earnings on October 24, 2012. Analysts are expecting earnings of $1.85 per share for Lockheed Martin, down 10.6% from last year's earnings of $2.07 per share. Analysts are more optimistic about Boeing than about Lockheed Martin. Only three out of 18 analysts rate the latter a buy compared to 19 of 22 for the former.

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