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Rather than lament investors’ error, a more shrewd response would be to bet against their mistaken beliefs. One way to do that would be to place buy orders below the market price on companies with strong earnings. To the extent investors unjustly punish those companies’ shares, you will scoop up some of them at a bargain. If so, history suggests that eventually you will turn a handsome profit. - Mark Hulbert
Doesn’t surprise me, in this current investing environment.
Pessimism in stocks seems to be the rule, no matter any good news blurbs that happen along.
Another ticker I own (NVDA) is about to come out with earnings. I’ll think the report will be stellar and yet somehow, investors will punish them.
Everyone is just in a selling mood. Hopefully, some event will turn the tide.
Right now it’s just plain UGLY.
Boeing (BA) Stock Edges Lower Despite Test Flight Launch
By: Schaeffer's Investment Research | May 20, 2022
• Boeing successfully launched its Starliner capsule headed to the International Space Station
• British Airways parent IAG also agreed to order 50 737 MAX jets
Boeing Co (NYSE:BA) is down 2.3% to trade at $124.12 at last check, despite the blue-chip aerospace name yesterday -- after more than two years of delays and engineering issues -- successfully launching its Starliner capsule headed to the International Space Station on a crewless test flight. Separately, British Airways parent IAG agreed to order 50 737 MAX single-aisle aircrafts, which will be delivered between 2023 and 2027.
Though the 20-day moving average has pressured the shares lower since late April, Boeing stock seems to have found support at the $120 level, which is also the site of its May 12, two-year low of $120.28. Nonetheless, BA still carries a hefty 36.8% year-to-date deficit.
The options pits continue to favor bearish bets. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BA's 50-day put/call volume ratio of 0.60 now ranks higher than all readings from the last year. In other words, calls are still outpacing puts on an overall basis, but puts are getting picked up at a much quicker-than-usual pace.
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Good step forward. Sounds like primary and backup thrusters failed so tertiary had to finish insertion burn. Not absolutely crazy but will need to show that won't happen again.
"Third time's a charm as Boeing's Starliner spacecraft blasts into orbit"
May 19, 2022 7:57 PM ET
"Following two previous failed efforts, Boeing (NYSE:BA) and NASA successfully launched the long-delayed Starliner space capsule on Thursday on a test flight without astronauts.
The United Launch Alliance Atlas V rocket launched the craft from Kennedy Space Center in Florida at 6:54 p.m. ET for a one-day cruise to the International Space station.
The ship is scheduled to test multiple docking technologies that Boeing (BA) was unable to perform during a 2019 flight that was cut short by software flaws.
Boeing (BA) returned a different capsule to the launch pad last summer, but corroded valves halted the countdown, resulting in another round of repairs; the program's many delays and repairs have cost the company ~$600M.
If Starliner reaches the space station and everything else goes well, 2-3 NASA test pilots could fly later this year or early next year."
https://seekingalpha.com/news/3841230-third-times-a-charm-as-boeings-starliner-spacecraft-blasts-into-orbit
Bullish or bearish?
Boeing 400K Share at $124.84 #darkpool print
By: Money Flow Mel | May 18, 2022
• $BA 400K share #darkpool print at $124.84.
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When that news blurb came out weeks ago....about the "copilot being the cause of the crash"? I thought it might be genuine. They just don't single out a member of the crew like that.
I suspect the cockpit voice recorder had clues in it that pointed to that specific crewmember. And the DFDR must've shown the elevators receiving a command from the cockpit to pitch over and dive.
I'll bet the Chinese government suppressed the info, as to not cause a panic and subsequent lack of trust in the Chinese air travel system.
It will eventually all come out. It was a shame to blame the aircraft at all.
What Do You Think, Porgie? What happened to cockpit audio?
"Boeing shares rise as China Eastern black box points to intentional nosedive"
"Boeing (NYSE:BA) shares bump to highs of the day, +5.8% following a Wall Street Journal report Tuesday that says flight data indicates someone in the cockpit intentionally crashed a China Eastern (NYSE:CEA) jet earlier this year.
Data from a black box recovered in the crash suggests inputs to the controls pushed the plane into the fatal dive, according to the report, which cites people familiar with U.S. officials' preliminary assessment of what led to the accident".
https://seekingalpha.com/news/3840105-boeing-shares-rise-as-china-eastern-black-box-points-to-intentional-nosedive
Boeing Bounced of 120 Support this week, still very oversold and extended short term
By: Options Mike | May 15, 2022
• $BA Wasn't bouncing with the market then more bad 787 news...
Bounced of 120 Support this week, still very oversold and extended short term.
8D fail and market rolls 90 pandemic lows in play.
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OMG. that's right out of Pennyland where a scammy company would send in a filing and "forget" to have the auditor or CEO sign off. BA shares are up 2.0%
I see that here:
https://finance.yahoo.com/news/exclusive-u-faa-finds-boeing-164619079.html
FAA is sending the paperwork package for 787 certifications back to Boeing due to "incompleteness".
Knocked the stock back when the news broke. Whether this is truly significant or not is yet to be determined.
Boeing Is The Best Performer in the $DJIA Today
By: Thom Hartle | May 13, 2022
• Today (8:33 CST), the best performer in the $DJIA is Boeing Company.
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I'll pass that to someone who works for the company, but in a completely different area. Maybe it will do some good... somehow.
Was thinking they might have disabled that system due to supply bottlenecks. Kinda like a restaurant not answering the phone when they're overwhelmed during mealtimes. But that sounds more serious and more enduring.
Two orders for electronic databases. My account shows the two open orders, but the system won't let me complete the process.
Customer service rep (who I am clearly bothering) says it's because I have an open invoice. My account doesn't show any open invoices and the rep agrees with that. But "that's what the computer says". So I can't buy the databases or pay for them which I'm willing to do right now.
So now the accounts receivable guy has just e-mailed me a link to pay my open invoice. I click it, and it says "You have no open Invoices".
Porgie,
Your experiences with BA are the norm. Top management checked out long ago but the decline picked up steam once McNerney took over in 2005.
No way for BA to survive apart from selling itself off in pieces to make good on that enormous debt pile. Negative $26/share net tangible value so shareholders own nothing here. It's all owned by the bondholders and pensions. Odds are the company ends up in bankruptcy court. Sure, the company will continue on but the common shares go to the graveyard.
Before anyone chimes in that BA will get a guv bailout, that makes no difference for common shareholders. Still get screwed. Just ask the shareholders of Government Motors when Barry provided a "bailout".
Excellent detailed post Porgie. Are those problems supply related? I've been a Boeing fan for years, but lost enthusiasm for adding to my small BA stock holding about a year ago.
Stunned to see Boeing down >6% today.
I have been a long time customer of Aviall and Jeppesen - nearly four decades. Both of those companies have a long history of serving the aviation industry.
Both those companies are divisions of Boeing, and in the last couple of years have been declining in terms of product availability and customer service. I can't place an order with Jeppesen or even do something so basic as to pay an invoice! It's like the people who are employed by those two companies just don't give a rat's ass if they make a sale, have a satisfied customer or even care about something so fundamental to their company's success as getting paid!
That kind of corporate lethargy comes from the top and works it's way down. If what this particular Boeing customer has been experiencing is emblematic of Boeing's corporate culture as a whole, Boeing's got real deep seated issues.
Boeing sees progress on 787, China, but supply chain risks loom
By: Reuters | May 12, 2022
• Boeing Co said on Wednesday supply chain disruptions slowed production and deliveries of its 737 MAX cash cow narrowbody, but does not see its overall plan for the year being disrupted.
SEATTLE (Reuters) – Boeing Co said on Wednesday it would study an equity raise after unlocking deliveries of its 787 and returning its cash-cow 737 MAX to service in China, but flagged supply chain risks amid broader certification and industrial problems.
Resuming deliveries of 787 Dreamliners and clearing inventories of its 737 Max are vital for Boeing’s ability to emerge from overlapping crises. The pandemic and the grounding of its best-selling model after fatal crashes have drained its cash and saddled Boeing with debt.
China, one of the top aviation markets in the world, has been a holdout in clearing the 737 MAX to return to commercial service. Boeing sold a quarter of its jets to China before the grounding and the years-long tit-for-tat tariff war.
West said China was close to clearing the 737 MAX to return to service, but progress with regulators and customers was delayed by stringent COVID protocols, not by broader trade tensions with Washington that have curbed jet orders.
“With China, without China, there’s robust demand,” West said.
“We still want to make sure we’re very sensitive to that part of the world,” he added. But when Boeing raises production, “it will be a function of our confidence in our supply chain, not the demand signals.”
Boeing shares were flat on Wednesday afternoon against a fractionally lower Dow Jones industrial average. Boeing popped up 4% shortly after West made some optimistic comments, but then the stock pared gains.
West also said Boeing’s 737 MAX production and deliveries were hit by shortages of a particular wiring connector, as the industry grapples with broader supply chain disruptions worsened by war in Ukraine. Overall he said the factory was primed to produce 31 jets monthly to plan.
“It’s a reflection of a crazy supply chain world that we live in right now,” West said. “It’s fairly localized and isolated, but we have options and we’re working them hard.”
“These things usually get resolved in a short time, and then we catch up and get movement,” he added.
The 35 aircraft Boeing handed over to customers in April – 28 of which were its best-selling 737 MAX – fell from the 41 jets delivered in March. Boeing separately raised doubts in late April that it would hit a 500-aircraft delivery target for the 737 MAX this year. [L2N2X12RW]
UNLOCKING DELIVERIES
Boeing is battling certification and industrial headaches across its jetliner portfolio. Production flaws have halted 787 Dreamliner deliveries for a year, cutting airline capacity. It is separately working to clear more than 300 737 MAX jets parked in inventory since the crisis.
The logjams have hurt Boeing’s cash flow while debt has soared, raising fears among investors and analysts of a potential credit rating downgrade for America’s largest exporter.
West said Boeing did not need to tap credit lines or raise equity immediately, but “all options are on the table” such as an equity raise in the longer term as deliveries and production bounce back.
On 787, West said U.S. air-safety regulators were reviewing a comprehensive package of certification documents Boeing submitted, while the planemaker prepares to deliver the first jets – but he stopped short of predicting when deliveries would resume.
Industry sources say 787 deliveries were likely still weeks away.
“I can’t give you a date, FAA decides, but there continues to be good momentum and people are hard at work,” West said.
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$BA Boeing resting on the monthly Point of Control (POC) in a historic consolidation zone
By: TrendSpider | May 11, 2022
• $BA Boeing resting on the monthly POC in a historic consolidation zone.
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Emirates says its Boeing 787 deliveries delayed by at least a year
By: Reuters | May 11, 2022
• Emirates Chief Operating Officer Adel Al Redha said on Wednesday the airline would not receive its Boeing 787 Dreamliners in 2023 and may not even receive its first until 2025 due to production issues at the U.S. plane maker.
Emirates airline said on Wednesday deliveries of Boeing 787 Dreamliners it has ordered are delayed by at least a year until 2024 and that it could be even longer due to the U.S. plane maker’s continued delivery suspension over structural flaws.
The Dubai-based carrier ordered 30 of the twin-aisle jets nearly three years ago as part of a broader deal that saw it cut the number of orders for larger 777X aircraft, now also delayed.
“Now we know for sure that’s not going to happen in 2023. It may not even happen in 2024,” Chief Operating Officer Adel Al Redha told reporters when asked about Dreamliner deliveries.
He said the airline was in talks with Boeing over the delays to the 787 Dreamliner and 777X deliveries, though declined to comment further when asked if Emirates was seeking compensation.
Two sources told Reuters in April that Boeing was planning to resume 787 deliveries in the second half of this year.
Boeing, which has pushed back delivery of the 777X by four years to 2025, had no immediate comment on Al Redha’s remarks.
An industry source said contracts typically have a clause that allows the airline to cancel orders for single aircraft if delivery of that jet is delayed by more than a year.
It was not clear if Emirates’ contracts had this clause, but Al Redha said the airline wanted the 777X jets which although smaller are the closest in size to the Airbus A380 superjumbo.
Emirates operates the largest fleet of A380s but will over time replace the jet with 126 ordered 777X aircraft after Airbus cancelled the A380 programme more than three years ago.
The airline has said it would refurbish and operate for longer 120 A380 and 777-330ER aircraft in its current fleet due to delays to deliveries of new aircraft.
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Boeing delivered 28 737 MAX jets in April -data
By: Reuters | May 10, 2022
• Boeing Co said on Tuesday it had delivered 28 of its cash cow 737 MAX single-aisle jets to customers in April, seizing on rebounding air travel even as the U.S. planemaker battles industrial and regulatory hurdles across its jet
SEATTLE (Reuters) – Boeing Co said on Tuesday it had delivered 28 of its cash cow 737 MAX single-aisle jets to customers in April, seizing on rebounding air travel even as the U.S. planemaker battles industrial and regulatory hurdles across its jet portfolio.
Five of the 737 MAX jets Boeing handed to customers were for Irish budget carrier Ryanair, while United Parcel Service took its last hump-backed 747-8 and Thai Airways took three 777-300ER jets, Boeing said.
The 35 overall deliveries in April was down from the 41 jets it handed over in March but more than double the 17 planes in the year-ago period.
The closely watched orders and deliveries monthly snapshot comes as Boeing struggles to overcome production flaws that snarled deliveries of its 787 Dreamliner for a year as well as certification risks on its forthcoming 737 MAX 10 and 777X jets.
On Monday, Boeing won a respite from the woes affecting its core widebody programs, when Lufthansa said it would buy 10 cargo planes including seven of the 777X version, also known as 777-8F.
The carrier also boosted its order for Boeing 787s as partof a compensation deal for delays to the 777X passenger version.
For April, Boeing booked 46 gross orders – including 44 for its 737 MAX from leasing companies and unidentified customers, and two 777 freighters, it said.
After 34 order cancellations, including AerCap scrapping two 787-10 jets, and instances where buyers swapped jet models, orders for April stood at 12.
For the year through April, Boeing booked 213 gross orders, or 157 after cancellations and conversions. After accounting adjustments, Boeing recorded 98 net orders for the year so far.
Overall, Boeing’s order backlog rose to 4,218 from 4,176, Boeing said.
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Boeing Time for new leadership? many think so. 145 last little support area
By: Options Mike | May 7, 2022
• $BA Time for new leadership? many think so. 145 last little support area. Has to get over the 8D.
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Major aircraft lessor Avolon says Boeing has 'lost its way'
By: Reuters | May 5, 2022
The head of the world's second-largest aircraft leasing company said on Thursday Boeing (NYSE:BA) had "lost its way" and might need new leadership to fix a flawed culture that overshadowed its revival.
The comments by Avolon Chief Executive Domhnal Slattery represented a rare public rebuke of Boeing by a significant customer, albeit one that cancelled orders for over 100 737 MAX jets during the COVID pandemic.
Boeing declined comment.
"I think it's fair to say that Boeing has lost its way," Slattery told the Airfinance Journal conference in Dublin, a gathering of the world's aircraft lessors who together own most of the world's passenger jets.
"Boeing has to fundamentally re-imagine its strategic relevance in the marketplace," he said, adding that this would require "fresh vision, maybe fresh leadership."
However, he said the issues could eventually be resolved.
"I have faith that they will figure it out," Slattery said.
Shares of Boeing fell to a nearly 1-1/2 year low last week after the U.S. planemaker posted a quarterly loss, unveiled $2.7 billion in charges and added costs and expressed doubts over hitting 737 MAX delivery targets.
Boeing also announced it was halting 777X production through 2023 and failed to specify when it would resume deliveries of its key twin-aisle 787 Dreamliner model after a year-long halt.
"They are burning cash at an unprecedented level. They're probably going to get downgraded," Slattery said.
SUCCESSIVE CRISES
"Boeing has a storied history...They build great airplanes. But it's said that culture eats strategy for breakfast and that is what has happened at Boeing," Slattery said.
A succession of crises from fatal crashes that led to a two-year grounding of the 737 MAX, to external regulatory pressures that interrupted 787 deliveries and delayed the 777X, have left America's biggest exporter badly shaken, another top buyer said.
Underscoring Boeing's woes, European rival Airbus pushed ahead on Wednesday with plans to raise competing single-aisle jet production by 50% from current levels to 75 a month in 2025, just as Boeing is struggling to certify its 737 MAX 10.
Slattery voiced concerns that the market could tilt too heavily in favour of Airbus if it delivers on its production plans, though some lessors say it remains to be seen how soon Airbus can reach its target due to fragile supply chains.
Longstanding board member Dave Calhoun became Boeing CEO in 2019 promising greater transparency after the group's earlier handling of the MAX crisis drew widespread criticism.
On Thursday, Boeing announced plans to move its headquarters from Chicago to the Washington, DC, area, highlighting efforts to bring decision-making closer to customers and regulators.
But Calhoun's promise of a reboot has been eclipsed by fresh problems on several core civil and defence projects, while another influential customer, Emirates airline president Tim Clark, has urged Boeing to "get its act together."
Boeing says it is working through the multiple challenges.
Calhoun told investors after the company's board was reaffirmed by shareholders last week that Boeing would overcome new problems with the T-7 military trainer and Air Force One jets and also felt good about progress on the 787 and 737 MAX.
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Boeing set to move headquarters to Arlington, Virginia, sources say
By: Reuters | May 5, 2022
• Boeing Co is set to move its corporate headquarters from Chicago to Arlington, Virginia, two people familiar with the matter said.
WASHINGTON/SEATTLE (Reuters) -U.S. planemaker Boeing Co is set to move its corporate headquarters from Chicago to Arlington, Virginia, two people familiar with the matter said.
The move, likely to be announced as early as next week, comes as Boeing works to emerge from successive crises and industrial problems that have deepened its focus on repairing relationships with customers, U.S. regulators and lawmakers.
The move to Arlington – across the Potomac River from the U.S. capital – will place Boeing senior leaders close to the Federal Aviation Administration, lawmakers and the Pentagon.
A Boeing spokesperson had no immediate comment.
Reuters reported last October, citing sources close to the company, that cost cuts and a more hands-on corporate culture have raised questions about Boeing’s long-term future in Chicago, and in turn the broad direction Boeing intends to take as it tries to regain its stride.
Boeing’s relocation decision was reported earlier by the Wall Street Journal.
Boeing has been working to repair its relationship with the FAA after the prior CEO Dennis Muilenburg was fired in 2019 after clashing the FAA over its review of the 737 MAX following two fatal crashes that killed 346 people.
Boeing already has an Arlington office that opened in 2014 and has significant unused space. It is just blocks from Amazon’s HQ2 building that is under construction.
The Chicago headquarters – a 36-floor, $200 million riverfront skyscraper – has also been at the crossroads of a cost-cutting campaign that has seen Boeing shed real estate, including its commercial airplane headquarters in Seattle.
Boeing moved its headquarters to Chicago in 2001, leaving its Seattle home after 85 years following its 1997 merger with St. Louis-based rival McDonnell Douglas – a decision that angered rank-and-file mechanics and engineers.
Boeing was seeking a post-merger headquarters in a neutral location separate from those existing divisional power centers.
Chicago, Cook County and Illinois awarded Boeing more than $60 million in tax and other incentives over 20 years to relocate. Those credits have expired, though Boeing was set to receive 2021 funds this year.
Some critics viewed the Chicago move as a symbol of a company that prized near-term profits and shareholder returns over long-term engineering dominance – a charge repeated after the 737 MAX crashes.
Once the symbol of a new Boeing, the vision of a corporate epicenter rising above its constituent parts has fallen at odds with the imperative of recapturing engineering dominance and repairing relationships with customers and federal regulators.
Boeing Chief Executive Dave Calhoun, for example, has made frequent trips to Boeing’s 787 Dreamliner factory in South Carolina to deal with production-related defects that have hobbled the program.
Calhoun is also working to win certification of the largest variant of the 737 MAX before a new safety standard on cockpit alerts takes effect at year-end and is hoping Congress will step in.
The deadline for changes was introduced as part of broader regulatory reforms at the Federal Aviation Administration following the fatal 737 MAX crashes.
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Why do you say that?
TSA air travel numbers still about 10% below 2019 pre-pandemic levels
https://www.tsa.gov/coronavirus/passenger-throughput
Best Performer in the $DJIA is Boeing Company
By: Thom Hartle | May 3, 2022
• Today (8:34 CST), the best performer in the $DJIA is Boeing Company.
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Boeing Repeat sweepers coming in to the 05/13/22 $140 PUTS
By: Money Flow Mel | May 2, 2022
• $BA Repeat sweepers coming in to the 05/13/22 $140 PUTS.
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Boeing $BA Wouldn't chase short, but bounce and fail of the 8D might be a opportunity
By: Options Mike | May 1, 2022
• $BA Another ugly report. Stretched and oversold bigtime here. Wouldn't chase short, but bounce and fail of the 8D might be a opportunity.
Lose the 140 area and your looking at the pandemic lows.. eeek!
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Boeing (BA) PT Set at $263.00 by UBS Group
By: ABMN | April 30, 2022
• Boeing (NYSE:BA – Get Rating) has been given a $263.00 target price by analysts at UBS Group in a research report issued on Thursday, MarketBeat reports. The firm presently has a “buy” rating on the aircraft producer’s stock. UBS Group’s price target points to a potential upside of 76.70% from the stock’s current price...
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Boeing 200K Share at $153.39 #darkpool print
By: Money Flow Mel | April 29, 2022
• $BA 200K share #darkpool print at $153.39.
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LOL That "advanced jet" is just the T-7A_trainer.
"April 28, 2022 | By John A. Tirpak
Boeing unveiled the first T-7A Red Hawk advanced trainer for the Air Force at its St. Louis, Mo., facilities April 28, revealing a jet bearing the tail flash of the 99th Flying Training Squadron at Joint Base San Antonio-Randolph, Texas, which will be the first unit to operate the new airplane. The first T-7A squadron is to be operational in 2024."
https://www.airforcemag.com/boeing-rolls-out-production-t-7a-first-new-jet-trainer-in-60-years/
Boeing unveils new advanced jet for U.S. Air Force
By: DBJ | April 29, 2022
The Boeing jet — one of 351 the U.S. Air Force plans to order — was shown prior to official delivery.
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They make quite a bit more money on civilian planes. Boeing's military segment amounts to about 30% of the company depending on how one measures it.
The dividend isn't coming back soon.
BA needs the US to get into a war, that defense money will prop it up
Yes, Boeing puts are very expensive.
I sold $143 puts for 40¢ today. That's about a 50% annualized return on the cash, or me buying Boeing at $143. I wont mind owning Boeing again at that price.
Posted on Fidelity ATP:
Boeing delays 777X another year and writes off $1.2B as future costs pile up
TRIBUNE CONTENT AGENCY 12:32 PM ET 4/27/2022
Symbol Last Price Change
BA 156.3039up -10.7361 (-6.4273%)
QUOTES AS OF 12:37:00 PM ET 04/27/2022
Apr. 27—Boeing on Wednesday disclosed a heavy first-quarter loss as it wrote off $1.2 billion related to two defense-side fixed-price aircraft projects and the impact of the war in Ukraine.
The company also announced it will push out delivery of the first giant 777X jet at least a year to 2025 — a delay that it estimates will incur a further $1.5 billion in abnormal production costs in future quarters.
Boeing (BA) said it will pause 777X production in Everett through the end of next year to avoid building up more inventory. It has already built and rolled out four flight test models and 20 production 777X jets.
Speaking on CNBC Wednesday morning, Boeing(BA) CEO Dave Calhoun said the 777X production halt is necessary to stop "producing airplanes which we then may have to rebuild and rework."
London-based aerospace financial analyst firm Agency Partners summed up Boeing's(BA) announcements in a note to investors as a "dreadful set of results" and wrote that the "general sense of disarray continues."
Likewise, Rob Stallard of Vertical Research Partners called it "another dreadful quarter from Boeing(BA)."
"What we think will really worry investors is that we keep getting MORE bad news," Stallard wrote.
Fixed price defense contracts take a hit
The company recorded a net loss for the first quarter of $1.2 billion, or $2.06 per share.
Revenue for the quarter was $14 billion, compared to the S&P Global Intelligence consensus estimate by analysts of $15.9 billion.
Boeing's (BA) cash on hand decreased over the quarter from $16.2 billion to $12.3 billion. As a result, its net debt ballooned from $41.9 billion at the end of 2021 to $45.4 billion at the end of March.
On the defense side of the company, Boeing(BA) wrote off $660 million for the Air Force One transport jets, the two 747-8 aircraft it is modifying in San Antonio, Texas. It blamed this on "higher supplier costs, higher costs to finalize technical requirements and schedule delays."
It also wrote off $367 million for the T-7 Air Force trainer jet under development in St. Louis, Missouri, "primarily driven by ongoing supplier negotiations impacted by supply chain constraints, COVID-19 and inflationary pressures."
Calhoun in a memo to employees early Wednesday reiterated those factors, tying the supply chain disruption and cost inflation to the impact of the pandemic and the war in Ukraine.
Boeing (BA) wrote off a further $212 million related to the invasion of Ukraine and sanctions against Russia.
Calhoun told employees that Boeing(BA) has "suspended engineering support, flight training and customer operations, as well as parts delivery and maintenance support services for Russian customers ... (and) halted the importation of titanium from Russia."
"While these actions had an impact on our business, they are the right thing to do," Calhoun wrote.
Calhoun added that Boeing(BA) has "built up a substantial titanium inventory."
"We have sufficient material and parts in inventory for production in the near-term and are working to ensure long-term continuity," he told employees.
Lost production in Everett
The major hit to Boeing's(BA) commercial airplane operations in Washington state came with the delay on the 777X. Delivery of the first jet is now scheduled for at least five years later than Boeing(BA) had planned when the jet was launched in 2013.
Calhoun told employees this was "based on an updated assessment of the time required to meet (Federal Aviation Administration) certification requirements."
On an earnings teleconference with Wall Street analysts Wednesday he said the FAA is now approaching all new airplane certification projects with new rigor.
"It's just gonna take a little longer, it's gonna be a little more thorough than it's ever been," Calhoun said. "We've got to give ourselves the time and freedom to get this right for the FAA."
In the last quarter of 2020, Boeing(BA) took a massive $6.5 billion charge for the previous delay on the 777X, with entry into service then pushed out to 2023.
Then last May, the FAA warned Boeing(BA) that it wasn't even close to meeting the safety agency's regulatory requirements. An FAA letter informed Boeing(BA) that a realistic timeline for the agency to certify the 777X to fly passengers was late in 2023, which would have implied first delivery early in 2024.
In announcing the new delay, Boeing(BA) did not say when in 2025 it hopes to deliver the first airplane.
Tim Clark, president of 777X launch airline Emirates, in an interview Tuesday said he met with Boeing(BA) executives in Dubai Monday who indicated it could be early that year.
Clark, whose original contract stipulated first delivery in April 2020, is skeptical after multiple Boeing(BA) schedule shifts and has told his staff to plan for the first 777X around July 2025.
With 777X production paused, Boeing(BA) will build only the 777F cargo jet through the end of next year.
In late January, Boeing(BA) Chief Financial Officer Brian West had said that because of high demand for cargo jets, Boeing(BA) planned to increase 777 production this year to three airplanes per month.
Boeing (BA) now says production of the freighter version won't be boosted until late next year.
The market for such big international long-haul jets is expected to recover very slowly from the staggering blow delivered by the pandemic.
While global domestic passenger air traffic in February was down just over 20% compared to the same month in pre-pandemic 2019, international passenger air traffic was still down 60%.
However, Clark said Emirates needs "a bow wave" of new planes mid-decade and is "hamstrung" by Boeing's(BA) delays.
By pausing the 777X, Boeing(BA) can triage its engineering and certification resources to focus on two more pressing issues: the 787 Dreamliner and the 737 MAX.
Boeing (BA) is seeking FAA approval for its fixes to manufacturing defects on the 787 that have largely halted deliveries of that jet for 18 months.
And it's trying to meet a year-end deadline to certify the final version of the 737 MAX — the MAX 10 — to avoid having to upgrade that airplane's crew alerting systems.
787 and 737 MAX issues
On the 787, Calhoun in January indicated that a mid-April resumption of 787 deliveries was a reasonable expectation. Having already blown past that target, on Wednesday he at least offered hope that deliveries will begin again in the second half of the year.
"We have submitted the certification plan to the FAA," Calhoun told employees, implying that Boeing(BA) believes it has a fix for the manufacturing issues and awaits only FAA concurrence.
Calhoun added that Boeing(BA) has completed the required work on the first few 787s and that company pilots are conducting check flights on those.
On CNBC Wednesday morning, Calhoun spoke from the 787 final assembly plant in South Carolina, saying "we have submitted the best that Boeing(BA) could submit. It's thorough. It's been investigated in every way."
The airplanes visible behind him had been reworked. "This factory is humming and airplanes are ready to be flown," he said.
"I'm confident that the FAA alongside our engineering team will work their way through this certification and we'll be back in the air sooner rather than later," Calhoun concluded.
Boeing (BA) said it now has 115 Dreamliners in inventory awaiting rework and delivery. Calhoun cautioned that even after the FAA gives Boeing(BA) the green light, the pace at which those can be delivered "will depend on the readiness of our airlines to get pilots ready, to get crews ready."
On the 737 MAX, Calhoun's message gave no indication that the MAX 10 can be certified by year end.
A two-year deadline is embedded in the 2020 Aircraft Certification, Safety, and Accountability Act that if missed would require either a revamp of the MAX 10 crew alerting system in order to get certified or a Congressional waiver.
Calhoun told analysts that the legislation was never intended to apply to the MAX.
"So I believe our chances are good with respect to getting legislative relief," he said. "It doesn't mean we'll get it. And if we don't, it's a problem."
Pressure has grown on Congress to not grant the waiver and to demand such a cockpit systems upgrade.
With that issue still hanging, Calhoun touted considerable progress getting the earlier versions of the MAX into service.
"The 737 MAX is now approved to fly in nearly every country, and since late 2020, the fleet has safely flown more than one million flight hours," Calhoun told employees. "We also steadily increased production and are on track to reach a rate of 31 per month in the second quarter."
Though the grounding of the MAX was lifted at the end of 2020, Boeing(BA) said it still has 320 completed MAXs in inventory, awaiting delivery.
CFO West said it will take until the end of next year before most of the 787s and MAXs in inventory are delivered.
Boeing's (BA) share price dropped sharply after the financial results were posted. It fell more than $15 or nearly 9%, dropping below $152 in early morning trading.
Next report will be great for Boeing ! Its coming , they will restore dividends soon .
Options Bears Blast Boeing Stock After Earnings Disappoint
By: Schaeffer's Investment Research | April 27, 2022
• Boeing also paused production of its 777X plane
• BA is trading at 17-month lows
The shares of Boeing Co (NYSE:BA) are down 7.1% to trade at $155.20 this morning, after posting first-quarter earnings and revenue that missed Wall Street's expectations. The top- and bottom-line misses were chalked up to delays in its commercial airplane and defense development programs, as well as charges related to the war in Ukraine. In addition, the company said the production of its 777X plane has been paused, with deliveries expected to start in 2025 -- more than a year later than previously forecasted.
Options traders are already chiming in today. So far, 51,000 calls and 55,000 puts have crossed the tape, which is six times what is typically seen at this point, with volume pacing in the 100th percentile of its annual range. Most popular is the weekly 4/29 150-strike put, followed by the 155-strike put in the same series, with new positions being opened at both contracts.
A broader look shows this penchant for bearish bets is nothing new. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BA's 50-day put/call volume ratio of stands higher than 93% of readings from the past year. This means that while calls are still outnumbering puts on an overall basis, puts have been getting picked up at faster-than-usual clip.
On the charts, Boeing stock is now trading at its lowest level since November 2020. Now facing pressure from every notable short- and long-term moving average, the equity is on track to lock in its biggest monthly percentage loss since the March 2020 broader market pullback. Over the last 12 months, BA is down 35.4%.
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Boeing (BA) Stock Tumbles On Wider Q1 Loss, $1.5 Billion 777x Charges; Dreamliner Plan Submitted to FAA
By: TheStreet | April 27, 2022
• "We increased 737 MAX production and deliveries and made important progress on the 787 by submitting our certification plan to the FAA," said CEO Dave Calhoun.
Boeing (BA) posted another wider-than-expected first quarter loss Wednesday thanks in part to around $1.5 billion in 'abnormal costs' linked to its 777x twin-engine jet.
The planemaker also said it submitted a certification plan to the U.S. Federal Aviation Administration that could see it resume 787 Dreamliner deliveries later this year, a move that mitigated the surprisingly wide first quarter loss.
Boeing said its adjusted core loss for the three months ending in March was pegged at $2.75 per share, down from a loss of $1.53 per share over the same period last year but well outside the Street consensus forecast of a 25 cents per share loss. Boeing took one-time charges of around $1.2 billion linked to the impact of its businesses in Russia as well as the Air Force One Presidential jet.
Group revenues, Boeing said, fell 8% from last year to $14 billion, a tally that also missed analysts' forecasts of a $16.02 billion tally. Free cash flow was estimated at -3.6 billion for the quarter, Boeing said, but the group reiterated its forecast to turn the figure positive in 2023.
"While the first quarter of 2022 brought new challenges for our world, industry and business, I am proud of our team and the steady progress we're making toward our key commitments," said CEO Dave Calhoun. "We increased 737 MAX production and deliveries and made important progress on the 787 by submitting our certification plan to the FAA."
"Despite the pressures on our defense and commercial development programs, we remain on track to generate positive cash flow for 2022, and we're focused on our performance as we work through certification requirements and mature several key programs to production," he added. "Leading with safety and quality, we're taking the right actions to drive stability throughout our operations, deliver on our commitments to customers and position Boeing for a sustainable future."
Boeing shares were marked 4.1% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $160.30 each, a move that would extend the stock's year-to-date decline to around 20.5%.
The FAA began looking into issues with the Dreamliner's fuselage in September of last year, just days after the planemaker grounded eight of the giant jets, which were made in South Carolina, after finding flaws that raised questions about their structural integrity and the risk of potential in-flight failures.
Production of the 737 MAX, the group's workhorse jet that was only recently approved for return to service following fatal crashes in 2018 and 2019, should rise to 31 aircraft per month this year, Boeing said.
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Boeing Channeling straight to the gap, fills at $158.47 (-6%)
By: TrendSpider | April 26, 2022
• $BA Channeling straight to the gap, fills at $158.47 (-6%).
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Buying a few down here seems like an easy bounce!
Boeing: Delays, Safety Concerns And Earnings Mean Shares Unlikely To Take Off
By: Geoff Considine, Ph.D | April 26, 2022
• Boeing has fallen almost 25% over the past year
• Reports Q2 results Apr. 27
• Wall Street consensus is shares are massively undervalued
• Market-implied outlook is moderately bearish
Shares of aerospace behemoth Boeing (NYSE:BA) have fallen 24.5% over the past 12 months, as compared with a 6.6% gain for the aerospace and defense industry (as defined by Morningstar) and 1.5% increase for the US equity market as a whole.
BA is the only stock in the top 10 holdings of the iShares US Aerospace & Defense ETF (NYSE:ITA) with a negative return over the past 12 months.
The aerospace giant is in the midst of a seemingly endless series of challenges, both internal and external. The ongoing COVID-related collapse in airline travel, along with safety concerns and production delays that have impacted the certification and delivery of aircraft are the two biggest problems for the Chicago, Illinois headquartered airplane manufacturer.
BA 12-Month Price History.
Source: Investing.com
Boeing has consistently underperformed expectations in recent years, with quarterly earnings that have missed the consensus expected values for three of the last four quarters, and nine of the last 12 quarters. Q4 of 2021, reported on Jan. 26, 2022, was particularly bad, with expected EPS of -$0.42 and actual EPS of -$7.69. Management attributed the disappointing Q4 results largely to higher-than-expected costs in the 787 program.
Trailing and estimated future quarterly EPS for BA.
Source: E-Trade
The challenge for investors is deciding whether there is enough bad news already reflected in the share price and whether there are indications that the company is getting back on track.
On Oct. 25, 2021, I thought that the odds were good that Boeing was turning the corner. As the Q4 results soundly demonstrated, I was wrong.
When I wrote that post, the Wall Street consensus rating was bullish, and the consensus 12-month price target was 27.5% above the share price. The consensus view implied by options prices, the market-implied outlook, was neutral. With the bullish Wall Street consensus and the neutral outlook implied by options prices, I wrote that I was cautiously optimistic and maintained a buy rating. Since then, BA has returned -16.9%, as compared with -5.9% for SPDR® S&P 500 (NYSE:SPY) and +0.5% for the iShares US Aerospace and Defense ETF.
For readers who are unfamiliar with the market-implied outlook, a brief explanation is needed. The price of an option on a stock reflects the market’s consensus estimate of the probability that the stock price will rise above (call option) or fall below (put option) a specific level (the option strike price) between now and when the option expires. By analyzing the prices of call and put options at a range of strike prices, all with the same expiration date, it is possible to calculate a probable price forecast that reconciles all of the option prices. This is the market-implied outlook and represents the consensus among buyers and sellers of options.
With six months since my last analysis, and Q2 earnings to be reported on Apr. 27, I have updated the market-implied outlook for BA and compared this with the Wall Street consensus outlook, as in my previous post.
Wall Street Consensus Outlook For BA
E-Trade calculates the Wall Street consensus outlook by aggregating the views of 15 ranked analysts who have published rating and price targets over the past there months. The consensus rating is bullish, as it has been for all of the past 12 months, and the consensus price target is 44% above the current share price. While there is a fair amount of dispersion among the individual price targets, even the lowest is 18.7% above the current share price.
Wall Street Consensus Rating And 12-Month Price Target For BA.
Source: E-Trade
Investing.com’s version of the Wall Street consensus outlook is calculated using ratings and price targets from 26 analysts. The consensus rating is bullish and the consensus 12-month price target is 41.36% above the current share price.
Wall Street Consensus Rating And 12-Month Price Target For BA.
Source: Investing.com
The prevailing view among the analysts is that Boeing is substantially undervalued, as was the case back in October. While the consensus 12-month price target is slightly lower than it was in late October, the decline in the share price since then has been large enough to substantially increase the expected return over the next 12 months.
Market-Implied Outlook For BA
I have calculated the market-implied outlook for BA for the 8.9-month period from today until Jan. 20, 2023, using the price of call and put options that expire on this date.
The standard presentation of the market-implied outlook is a probability distribution of price return, with probability on the vertical axis and return on the horizontal.
Market-Implied Probabilities Of Price Returns For BA Till Jan. 20.
Source: Author’s calculations using options quotes from E-Trade
The market-implied outlook is tilted to favor negative returns, with the peak in probability corresponding to a price return of -14%. This is a somewhat bearish outlook. The annualized volatility calculated from this distribution is 41.5%, as compared with 40% implied volatility calculated by E-Trade for the options expiring on Jan. 20, 2023.
To make it easier to directly compare the relative probabilities of positive and negative returns, I rotate the negative return side of the distribution about the vertical axis (see chart below).
Market-Implied Probabilities Of Price Returns For BA Till Jan. 20.
Source: Author’s calculations using options quotes from E-Trade
This view highlights the higher probabilities of negative returns, as compared with the probabilities for positive returns, across a wide range of the most probable outcomes (the dashed red line is above the solid blue line over most of the left half of the chart above). This is a more pronounced negative orientation than in late October.
Theory indicates that the market-implied outlook is expected to have a negative bias because investors, in aggregate, are risk-averse and, thus, tend to overpay for downside protection (put options). There is no way to robustly estimate the magnitude of this bias, however. Even considering the potential bias (which requires qualitative judgment), I interpret this market-implied outlook as somewhat bearish.
Summary
Boeing has been beset by mishaps in recent years. The litany of safety concerns, production delays and certification challenges do not inspire confidence in management.
While the shares are trading at a substantial discount to their value 12 months ago, the question is whether the cheaper shares provide sufficient compensation, given the risks.
The Wall Street consensus outlook is bullish, with a 12-month price target that is about 43% above the current share price. As a rule of thumb, for a buy rating, I want to see an expected 12-month return that is at least half the expected volatility (which is 41.5%). BA far exceeds this threshold if we take the consensus price target at face value. The analysts have been too optimistic over all of the past year, so I discount their views.
The market-implied outlook is moderately bearish, with peak probability corresponding to a return of -14% over the next 8.9 months. I am changing my rating on BA from bullish/buy to neutral/hold.
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