by Ian Harvey
October 26, 2018
OUT WHILST THE GOING IS GOOD!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
Boeing Co (NYSE: BA)
Boeing Co (NYSE: BA) reported earnings Wednesday, after the market closed, with the aerospace giant continuing its run of strong performance -- particularly in commercial airplanes. This allowed it to raise its full-year guidance again. Boeing has had a run of stellar growth in earnings per share and free cash flow. And “Earnings Predictions Members”, with a call option, realized 33% potential profit despite the market set-backs!
The Chicago-headquartered Boeing reported adjusted earnings of $3.58 a share, topping street estimates of $3.47. Revenue of $25.1 billion also beat expectations of $23.89 billion.
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
The Details Presented Previously……..
Boeing Co (NYSE: BA), the largest aircraft manufacturer and one of the major aerospace and defense contractors in the United States, will report earnings before the market opens. The consensus earnings estimate is $3.51 per share on revenue of $24.08 billion; but Whisper number is up to $3.58 per share. Consensus estimates are for year-over-year earnings growth of 29.04% with revenue decreasing by 0.94%.
Boeing enjoys a solid inflow of contracts from both the Pentagon as well as foreign allies, courtesy of the company's varied product offerings.
Among the commercial contracts that Boeing won in the third quarter, the significant ones include a $9.6-billion order for delivering 75 737 MAX 8s, three 787-9 Dreamliners to Air Lease Corporation and an $8.6-billion order for supplying 75 of its 737 MAX 8 aircraft to Jet Airways.
In the defense space, the company clinched a contract worth $9.2 billion for delivering Advanced Pilot Training aircraft and ground-based training systems and a $2.9 billion contract for the production of the fourth lot of KC-46 aircraft, spares and support equipment. The company also won a few more multi-million-dollar contracts from the Pentagon.
Such solid order growth must have boosted Boeing's backlog count, which should get duly reflected in the upcoming quarterly results.
Ken Herbert, an aerospace analyst with Canaccord Genuity wrote in a report, "Despite the growing list of potential risks – interest rates, fuel prices, trade and tariff issues, emerging market growth – the global economy remains very supportive of air traffic growth, which is driving high aircraft utilization rates and increasing investment on these aircraft to support this growth."
"Boeing is our No. 1 pick for extended cash flow ramp and a 7.1 percent cash flow yield," Cowen aerospace analyst Cai von Rumohr told clients in his own recent research note.
Reasons why Boeing analysts expect solid third-quarter financial results…..
Short interest has decreased by 3.1% and overall earnings estimates have been revised higher since the company's last earnings release.
Option trade to consider: Buy the BA NOV 16 2018 370.000 CALL at approximately $6.00.The Result So Far………
Boeing’s shares have surged +36.8% over the past year, outperforming the Aerospace & Defense industry, which gained +11.3% during the same time period. Boeing ended the third quarter of 2018 on an impressive note, with both its top and bottom lines comfortably surpassing their respective expectations.
Boeing reported adjusted earnings of $3.58 a share, topping street estimates of $3.47. Revenue of $25.1 billion also beat expectations of $23.89 billion.
Moreover, the company witnessed an increase in backlog, which jumped to $491 billion. Commercial aircraft backlog accounted for $413 billion. Also, the company raised its guidance for full-year earnings per share in a range of $14.90 to $15.10, up from a prior view of $14.30 to $14.50. It expects to touch $98 billion to $100 billion in revenues, up from a prior view of $97 billion to $99 billion.
The optimistic outlook is due to the acquisition of a new defense business along with positive changing trends in the air travel industry.
The management is also quite bullish on new business in the defense sector as well, owing to the recent turn of events. "During the quarter we captured important new defense business, winning and investing in the MQ-25 and T-X programs and securing the MH-139 contract, clearly demonstrating the value Boeing brings to customers while positioning us well for future growth opportunities," Boeing Chairman and CEO Dennis Muilenburg said.
The tax cuts from the Trump administration also played a major role in the positive numbers reported in this quarter. As a result, it appears that Boeing is on an upward trajectory at the moment.
So, for “Earnings Predictions” members, who managed to execute this trade recommended by Stock Options Made Easy; potential profits of 33% were at-hand; and more likely to follow!
Entering the option trade at a cost of $6.00 or less; and the price of the option reached $8.00 yesterday; a profit of 33% was made in just a couple of days. Therefore, one options contract would provide a profit of $200.00.
A NICE FINISH TO THE WEEK!
Analysts emphasize that Boeing is the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries. The company's 20-year market outlook forecasts that commercial jetliner demand is expected to increase by 4.1%, with single-aisle jets being the major driver behind this demand growth.
Boeing raised its full-year revenue guidance by $1 billion on Wednesday. It attributed the increase to strong defense revenue and its recently closed acquisition of KLX, which will beef up Boeing's new services unit.
Also, Boeing still expects to deliver 810 to 815 commercial jets in 2018. In other words, by year-end, it will fully catch up on deliveries that were postponed by engine delays.
As well, Boeing boosted its core EPS guidance range by $0.60, to $14.90 to $15.10. It now expects to achieve an operating margin between 12% and 12.5% in its commercial airplanes segment, compared with a previous forecast of greater than 11.5%.
In short, Boeing is still firing on all cylinders and will continue to soar. The company's Q3 results and upgraded outlook point to a strong finish to 2018 and further revenue, earnings, and cash flow growth in 2019.
ACTION TO TAKE…….
** A New Options Trade To Consider: Buy BA JAN 18 2019 290.000 CALL at approximately $8.00.
Place a pre-determined sell at $16.00.
Also include a protective stop loss of $3.20.
As you would have by now realized, some of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but it is obvious that it applies in this case; and during earnings season this strategy of predicting earnings has been very profitable.
Sometimes it is our approach to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use – such as found with the “Earnings Predictions Program”. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.
Strategies to Consider……
It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?” .....READ MORE.....
"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.……continue reading this article……
Our proven track record says it all!!
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