ACHR

Boeing Burning Through Cash

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  Image: Boeing’s shares have seen better days. By Brian Nelson, CFA Aerospace giant Boeing (BA) reported disappointing third quarter results on October 23, with revenue and non-GAAP earnings per share coming in lower than expected. Revenue fell 1% in the quarter, while the firm posted large operating and net losses, which reflected impacts from the IAM strike and previously announced charges on its commercial (777X, 767) and defense (T-7A, KC-46A Tanker, Commercial Crew, and MQ-25) programs. GAAP loss per share was $9.97, while core non-GAAP loss per share came in at $10.44. These numbers aren’t reflective of Boeing’s long-term earnings power, but they showcase the challenges the firm continues to face. Management acknowledged that the path ahead will be … Read more

Lockheed Martin Represents Key Aerospace & Defense Exposure

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By Brian Nelson, CFA On October 17, Dividend Growth Newsletter portfolio holding Lockheed Martin (LMT) reported decent third-quarter 2023 results with the firm growing revenue roughly 1.8% on a year-over-year basis, and the firm beating the consensus estimate for non-GAAP diluted earnings per share. We like Lockheed as our aerospace and defense exposure more than Boeing (BA), given the latter’s long list of troubles and deteriorated financial health, punctuated in part by troubles during the height of the COVID-19 pandemic and loss of life related to its 737 MAX platform. We think Lockheed offers a much better risk/reward and a healthy dividend to boot. Lockheed Martin yields ~2.8% at the time of this writing. When Lockheed reported third-quarter results, the … Read more

We’ve Updated Our Fair Value Estimate of Boeing; Has Aerospace Bottomed?

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Image: Boeing is expecting to turn the corner with respect to positive free cash flow in 2022 and grow it to ~$10 billion annually by 2025/2026. We think this is achievable. Image Source: Boeing By Brian Nelson, CFA The breakout of COVID-19 wreaked havoc on the airline business and the commercial aircraft-making business alike. But has the commercial aerospace industry finally bottomed? We took a hard look at our valuation model of Boeing (BA), and we’ve tweaked our near-term profitability assumptions and made material changes to our estimates of working capital assumptions in the out-years. Though the result was a lower fair value estimate for the aerospace giant, we reiterate that after several quarters of negative free cash flow, Boeing … Read more

Lockheed Martin Facing Near Term Headwinds; Longer Term Outlook Remains Bright

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Image Source: Lockheed Martin Corporation – Second Quarter of Fiscal 2022 IR Earnings Presentation By Callum Turcan Lockheed Martin Corporation (LMT) reported earnings for the second quarter of fiscal 2022 (period ended June 26, 2022) that missed consensus top- and bottom-line estimates, largely due to delays in securing another domestic F-35 contract and supply chain hurdles. In our view, these are near term headwinds that are resolvable. Reportedly, Lockheed Martin is nearing a deal worth ~$30 billion with the US Department of Defense (‘DoD’) covering orders for around 375 F-35 aircraft. As it concerns supply chain hurdles, the resumption of normal economic activities (as the worst of the COVID-19 pandemic is put behind the world economy) should steadily allow industrial … Read more