Boeing Beats on Earnings, Disappoints on Guidance

Boeing (BA) reported earnings this morning and they were better than expected. However, its guidance was disappointing. According to Dow Jones Newswires, analysts expected Boeing to earn $1.36 a share on $17.57 billion in revenues. The company reported earnings that, at $1.75 a share, were 29% better than expected, while revenues of $17.94 billion were 2% higher.Before getting into its disappointing guidance, it's worth pointing out that Boeing is one of those companies where success or failure is measured over a decade rather than three months. That's the time it takes to design and build a new aircraft and sell enough of them to determine whether that huge investment will pay off for shareholders.

The two biggest issues that remain unanswered for Boeing investors are the 787 and the Tanker. As I wrote earlier, the 787 is Boeing's $166 million, 250- to 330-seat passenger aircraft with 865 orders and an estimated $150.6 billion backlog. And it's not clear whether Boeing will be able to deliver those orders, although it did recently complete a fairly successful test flight. Meanwhile, Boeing is going to be bidding on a $35 billion deal to supply the Air Force with airborne refueling tankers in June 2010.

These two unresolved matters hang over Boeing stock for the long-term. But according to HeraldNet, Boeing plans to deliver its first 787 in the fourth quarter of this year.

Boeing's weak 2010 guidance springs from the failure of defense spending to offset lower spending in the commercial sector. Boeing lowered its 2010 guidance by between 7% and 13% -- suggesting it will earn $3.70 to $4 a share this year, compared with analysts' guess of $4.26. The reason? Output declines in the 777 airliner and the reduced scope of army modernization and missile-defense programs, according to Dow Jones Newswires.

Boeing stock is up over 4% in early trading.
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