Saturday, April 25, 2015

Analyzing Boeing's Q1 2015 Results

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Boeing published Q1 2015 financial results on the 22nd of April before the opening bell. In my view, the results are mixed and have a negative undertone. In this blog, I will summarize why I am not really satisfied with the results, but why I think this is a nice buying opportunity. I will do so by looking at the analyst estimates, forecast (provided by Boeing) and analysis of the most important financial parameters. Boeing presented the following results:

Figure 1: YoY relative results (Source: Dhierin-Perkash Bechai)

The results as can be seen in the figure above look very strong. Disappointing about the results are the low cash flow and negative free cash flow (FCF). Despite the disappointing results, I think this is a nice moment to invest in Boeing shares. Results in the remaining quarters are expected to be robust judging from Boeing's reaffirmed guidance. Also, for the longer term, this should be a nice entry point: The Boeing 787 is getting closer to going cash positive on production. Increases in production rates in the coming years will boost revenue and value for shareholders. With higher production rates, a maturing Boeing 787 production and streamlining the Defense unit, the operating margins should increase.
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