It's been a rough earnings season thus far for the component stocks of the Dow Jones Industrial Average (^DJI 0.13%).
With more than half of them now having reported, the script seems to be the same at each: Current-quarter sales and profits are down, and the future looks even worse. Earlier today, for example, chemical company DuPont (DD +0.00%) reported earnings that missed on the top and bottom lines and severely tempered its guidance for the remainder of the year.
It should be no surprise, in turn, that the blue-chip index is down more than 400 points since the aluminum giant Alcoa (AA +0.00%) unofficially kicked things off two weeks ago.
Boeing breaks the mold
In somewhat of a surprise today, Boeing (BA +0.53%) seems to have bucked this trend -- at least in part.
For the third quarter, the aerospace company reported earnings per share of $1.35 on revenue of $20.01 billion. Analysts polled by Thomson Reuters had projected earnings of $1.13 per share on revenue of $20.03 billion. Thus, while Boeing beat on the bottom line, it missed on the top -- though the trend is reversed when the figures are compared to its performance in the same quarter last year.
|
Metric |
Actual |
Estimate |
Last Year |
|---|---|---|---|
|
Revenue (billions) |
$20.01 |
$20.03 |
$17.73 |
|
Earnings per share |
$1.35 |
$1.13 |
$1.46 |
Source: The Wall Street Journal; Boeing's 3Q12 earnings release.
The wide divergence in top- and bottom-line performance relative to last year -- namely, higher sales but lower profits -- was a result of Boeing's newest commercial aircraft, the 787. According to The Wall Street Journal, "The company isn't making a profit on initial 787 deliveries, which weighed on margins at its commercial arm during the quarter." Additionally, costs associated with pension benefits are starting to rise. By next year, Boeing predicts these expenditures to reach $3.5 billion.
What's most notable about Boeing's earnings release, however, was the company's optimism going forward. Unlike a litany of other companies that have downgraded their forward guidance -- the list includes Alcoa, Intel (INTC +4.89%), General Electric (GE 3.94%), and Caterpillar (CAT 1.81%), among others -- Boeing shockingly raised its forecast.
According to Boeing's chief executive officer James McNerney: "Underpinned by our solid performance to date and positive outlook, we are raising our year-end guidance for revenue, earnings and operating cash flow. We remain well positioned for long-term growth with a clear focus on quality, productivity and disciplined program execution."
The company now sees full-year EPS falling somewhere between $4.80 and $4.95, up from $4.40 to $4.60. In addition, total revenue is now projected to be between $80.5 billion and $82 billion, up from $79.5 billion to $81.5 billion.
The Foolish bottom line
Needless to say, Boeing's results (and particularly its optimistic forward guidance) were a welcome relief to the market. Shares in the company are currently trading higher by $0.27, or 0.37%. If you're a current or prospective investor in Boeing, there's an in-depth report on the company that you need to see. Authored by our in-house specialist on the company, this report details both the risks and the opportunities associated with holding its stock. To download your own copy, along with a year of free updates, simply click here now.
