Boeing is the IBD Stock Of The Day as signs of improving production assuage investor worries and keep the plane maker on track for a return to profitability. Boeing stock topped a buy point and pegged a high Wednesday after jumping on an earnings beat.
Dow Giant Boeing Earnings Beat
"We are well positioned to meet the operational and financial goals we set for this year and for the long term," Boeing CEO Dave Calhoun said in a quarterly earnings release Wednesday.
The release showed the company beating estimates for the second quarter, while maintaining guidance on free cash flow for the full year.
"With demand strong, we're steadily increasing our production rates across key programs," Calhoun added.
On Wednesday, the Dow Jones aviation and defense giant stuck to its prior target of producing 38 737 Max aircraft per month later this year, up from 31 a month.
It still plans to raise production of the 787 Dreamliner to five planes a month this year, up from four per month now.
The reiteration of those goals follow a recent, weeklong strike by Spirit AeroSystems union workers. Some analysts were worried that the job action could hurt production of the 737 Max, Boeing's bestselling jet, for which Spirit is a critical supplier.
For 2023, Boeing said Wednesday it still expects to deliver 400-450 737 Max narrow-body jets and up to 80 Dreamliner widebody jets.
The pace of aircraft deliveries is key to Boeing's cash flow target because customers make the bulk of their payments upon delivery.
Boeing Stock Gaps Up
Shares of the Dow Jones aviation giant gapped up 8.8% to 232.89 in Wednesday's stock market action.
Boeing stock cleared a 223.91 buy point from a flat base that formed largely above the 50-day moving average, the IBD MarketSmith chart shows. The buy range stretches to 235.11. BA stock notched a 52-week high of 233.08 intraday.
European plane maker Airbus, which also reports Wednesday, eased 0.3%.
Spirit reports Aug. 2 before the market open. Spirit stock gained 3.6% Wednesday.
On Wednesday, Boeing stock led the advance of the Dow Jones Industrial Average, with the blue-chip stock index posting its 13th straight day of gains.
BA stock earns a middling IBD IBD Composite Rating of 75 out of a best-possible 99. Its RS Rating has improved to 82, which means it has outperformed 82% of all stocks in IBD's database over the past year.
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Key Jet Production, Deliveries Pick Up
Commercial aviation continues to recover after the Covid-19 pandemic, with a further boost from China's reopening this year.
Plane makers are trying to ramp up production after struggling to meet robust demand from airline customers.
In the second quarter, Boeing managed to deliver 136 aircraft, a 5% increase from the prior quarter. That included 60 deliveries in June, the most since March.
On Wednesday, Boeing reported that it lost 82 cents per share for Q2, less than feared. Revenue rose 18% to $19.75 billion in the quarter, also ahead of views. The commercial jet business drove its quarterly gains, offset by defense weakness.
The company also reaffirmed guidance for free cash flow of $3 billion-$5 billion for the full year. Cash flow is a closely followed metric as the company seeks an earnings turnaround.
Analysts expect Boeing to sharply narrow losses per share for the full year and to rebound to EPS of $5.46 in 2024, FactSet shows.
Year to date, Boeing stock is up nearly 19%, including an 11.4% gain in the past three months. It had slumped for most of 2021 and 2022 amid production and delivery challenges for key jets.
