The Boeing Co. Suffers a Strategic Blow; General Electric Gears Up for Q2 Report

The Boeing Company is in a heated race for sales with rival Airbus, and the latter launched a major upgrade this week. Meanwhile, General Electric is gearing up to report its second-quarter earnings tomorrow.

Jul 17, 2014 at 3:00PM
Longview

The Dow Jones Industrial Average (DJINDICES:^DJI) is down 76 points as of 2:30 p.m. EDT following reports that a Malaysian passenger jetliner has been shot down in Ukraine near the Russian border after the U.S. and EU imposed new sanctions on Russia. With details still emerging on the downed airliner, the market had economic news to digest as well.

Initial unemployment claims fell more than expected last week to 305,000, which is the latest sign of a slowly but surely improving labor market. On another positive note, Thomson Reuters data shows that more than 68% of the 66 S&P 500 companies that have reported earnings through Thursday morning have topped Wall Street expectations. For context, 63% of companies on average have beaten expectations since 1994. 

With all of that in mind, here are a couple of industrial companies making the headlines in the markets today.

Inside the Dow, Boeing (NYSE:BA) was dealt a blow from European rival Airbus Group (NASDAQOTH:EADSY) at the Farnborough International Airshow. Airbus launched a major upgrade of its A330 long-range jet, which directly competes with Boeing's 787 Dreamliner. Airbus took a gamble, hoping that its $1.36 billion to $2.71 billion investment -- chump change compared to the cost of developing a complete aircraft -- to upgrade the A330 with new Rolls-Royce PLC engines would generate 14% gains in fuel-efficiency.

Images

Boeing has landed its fair share of orders this week. Source: Boeing

Airbus' move to re-engine the plane will enable the aircraft manufacturer to lower the price substantially on its A330 as it competes with Boeing's more expensive 787 Dreamliner.

When speaking of the development to The Wall Street Journal, John Leahy, chief salesman for Airbus' commercial-plane unit, had this to say: "I think they are caught between a rock and hard place. What they basically can't get their heads around is how we did it and how they can answer it."

Boeing and Airbus are locked in a heated battle, and investors would be wise to keep an eye on orders tallied at the end of the week during the Farnborough airshow to better understand sales momentum between the two rivals.

Also inside the Dow, General Electric (NYSE:GE) is gearing up to release its second-quarter report Friday. Analysts are expecting the industrial conglomerate to post earnings of $0.39 per share on revenue of $36.3 billion. Those expectations reflect respective increases of 8.3% and 3.4% compared to last year. 

There looks to be a substantial amount of information for investors to digest during General Electric's conference call: the large Alstom deal and its details, a soon-to-be spin-off of GE Capital's North American retail finance, and more. Investors will also be taking a magnifying glass to GE's industrial business, which is continuing to expand as the company refocuses on its core businesses, rather than GE Capital and finance business.

One important piece of information that investors should look for is whether GE is making progress to improve its operating margins. GE plans to improve its operating margins to 17% in 2016, a 130 basis-point improvement from 2013's 15.7%.

Another important figure for investors to watch will be General Electric's order backlog, which was at $245 billion at the end of the first quarter. Though orders from the Farnborough International Airshow won't be added into the figure until the third quarter, it's clear GE's products remain in demand, and the company's order backlog will fuel revenue growth in the short term. 

Dividend stocks like Boeing and GE can make you rich! Here's more top dividend stocks, Free
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Daniel Miller has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers