Boeing Stock Sinks Ahead of Q4 Earnings
Boeing Stock Sinks Ahead of Q4 Earnings
Regulatory scrutiny of the airplane maker has increased since a door blew off of the fuselage of one of its 739 Max 9 aircraft during flight
- Boeing is scheduled to report fourth quarter earnings on Jan. 31.
- The company’s stock price is sinking amid heightened regulatory scrutiny.
- Boeing stock offers considerable premium for options traders.
The Boeing Company (BA) is scheduled to report fourth-quarter fiscal results on Wednesday, Jan. 31, before the opening bell. A conference call will follow at 10:30 a.m. EST with CEO David Calhoun and chief financial officer Brian West.
This quarter’s conference call is especially important to investors following the Air Alaska accident that occurred in early January when a 737 Max 9 aircraft’s panel blew off during a flight. The incident has invited increased regulatory scrutiny of the company amid another ongoing crisis with its 737 Max jets.
What do investors expect?
Analysts expect adjusted earnings per share (EPS) to cross the wires at $-0.62 on $21.05 billion in revenue. The EPS estimate has improved steadily over the last four weeks leading up to the announcement, rising 29% from a month ago, according to Bloomberg figures. However, EPS has missed estimates in seven of the last eight reports.
Orders remain strong, with Boeing currently holding a backlog of about 6,200 jets—the highest ever. For 2023, Boeing delivered 528 aircraft. Investors will likely be critical on any guidance the company provides on future orders, but it should remain the leader in Asia, where it just delivered its first 737 Max to China in more than five years. Boeing’s defense, space & security segment revenue is expected to drop as ongoing troubles with contracts continue to post losses.
Still, even impressive results may not help the airplane maker. The stock price was down over 6% today, after Reuters reported Southwest Airlines (LUV) changed its 2024 fleet plans to reduce the number of 737 MAX aircraft and has no plans to order MAX 7’s, a plane that has seen several certification delays. Alaska Air Group (ALK) also announced that it would reviewi decisions on future Boeing orders.
Trading Boeing earnings
BA briefly traded below 200 for the first time since November and is down over 23% on a year-to-date basis. That is the largest monthly percentage drop since September 2022. This price action has boosted the stock’s implied volatility rank (IVR) to a lofty 72.6. That said, traders who want to play a direction on the stock could likely collect some substantial premium.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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