Friday, July 29, 2016

Boeing Smokes 'em If They Got 'em

Guidance and projections on corporate earnings is a tricky place. The old adage smoke'em if you got'em (cigars) is in play when it recognizes cost through write downs against stock valuations during current constant times. The numbers after third quarter make even the squeamish turn its color of green into red. Boeing is making adjustments from both the 787 and 767 Tanker program, pushing its stock around on a year over year basis. Actual numbers are found in its stock valuation as it drops and changes with the financial models that are set-up for future improvements, and as it rapidly approaches a "norming" phase for its family of aircraft. Every type is undergoing a vast changes from the 737 Max to the 787 program with only the 747-8's in a doubtful position. 

The forecasts are cast in shadows from vulnerabilities exposed from its KC-46 tanker program costs to its 777X program having some sales uncertainty. Having both the Max and 787-10 stepping forward in the same time slot may certainly arouse some stock pricing angst and will also add to the Boeing risk element for its financials. Hinting at retiring the 747 program is also a signal Boeing is propositioning its next foray into advanced technology by losing the monkey hanging over its head.

In other words Boeing has dumped cost up front so it may proceed forward in a more solid financial position as its new programs come into fruition


Will Boeing Commercial Planes Still Disappoint in 2016?

In spite of the dangers where Boeing is walking through important program inefficiency, the outlook should improve by year end or the Beginning of 2017 as it maintains solid production output and then benefiting  through generating a cash abundance environment for its commercial programs.