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Boeing Reports Improvement During First Quarter Due to 737 MAX Deliveries; Maintaining $257 FVE

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

Wide-moat-rated Boeing reported improvement in the first quarter, as 737 MAX deliveries resumed and allowed the firm to materially reduce operating losses. Sales decreased 10%, but the firm got materially closer to break-even due to a mix shift toward the 737 MAX at Boeing commercial and a lack of a KC-46a tanker charge at Boeing defense. Net loss per share was comparable to the prior year, $0.92 in 2021 versus $1.11 in 2020, due to higher interest expense and lower income tax benefit. We’re maintaining our $257 per share fair value estimate, as the time value of money was offset by our reduced estimates for 737 MAX deliveries (due to electrical issues) and 787 margins due to lower production. 

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Company Profile

Business Description

Boeing is a major aerospace and defense firm. With headquarters in Chicago, the firm operates in four segments, commercial airplanes, defense, space & security, global services, and Boeing capital. Boeing's commercial airplanes segment generally produces about 60% of sales and two-thirds of operating profit, and it competes with Airbus in the production of aircraft ranging from 130 seats upwards. Boeing's defense, space & security segment competes with Lockheed, Northrop, and several other firms to create military aircraft and weaponry. The defense segment produces about 25% of sales and 13% of operating profit, respectively. Boeing's global services segment provides aftermarket servicing to commercial and military aircraft and produces about 15% of sales and 21% of operating profit.

100 North Riverside Plaza
Chicago, IL, 60606-1596
T +1 312 544-2000
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 141,000