Boeing shares close lower on Wednesday as company pares full-year forecast for defense unit, second-quarter earnings beat

July 26, 2018 7:30 am

Boeing Company’s (BA) second-quarter earnings, reported on Wednesday, exceeded Wall Street estimates, but results were clouded by a lower full-year operating margin forecast for the company’s defense unit due to a more costly KC-46 aerial refueling tanker program.

Boeing shares closed lower for the fourth time in the past ten trading sessions in New York on Wednesday. The stock went down 0.66% ($2.35) to $355.92, after touching an intraday low at $345.50, or a price level not seen since July 12th ($342.74).

Shares of Boeing Company have surged 20.69% so far in 2018 compared with a 6.45% gain for the underlying index, S&P 500 (SPX).

In 2017, Boeing’s stock soared 89.43%, thus, it again outperformed the S&P 500, which registered a 19.42% return.

Boeing’s total revenue went up 5% to $24.26 billion during the second quarter ended on June 30th, while the company booked 239 net jet orders. The latter also included 91 wide-body aircraft.

Operating margins in Boeing’s defense, space and security business were reported to have dropped to 9.3% during the past quarter from 11.9% in the same period a year ago, due to higher costs of $111 million in its KC-46 aerial refueling tanker program.

On the other hand, operating margins in Boeing’s commercial airplanes unit went up to 11.4% during the second quarter from 9% in the year-ago period.

Meanwhile, core earnings per share, which exclude some pension and other costs, were reported at $3.33 during the second quarter, which exceeded the median analyst forecast pointing to earnings of $3.26 per share.

Boeing revised up its full-year revenue forecast to a range of $97-$99 billion from a range of $96-$98 billion, as expected previously.

Additionally, the company kept its full-year core earnings forecast unchanged at $14.30 to $14.50 per share. In comparison, analysts on average expect core earnings of $14.56 per share.

However, the plane maker cut its full-year 2018 operating margin forecast for defense business to a range of 10.0%-10.5% from 11.0% it had previously projected.

According to CNN Money, the 23 analysts, offering 12-month forecasts regarding Boeing Company’s stock price, have a median target of $400.00, with a high estimate of $500.00 and a low estimate of $309.00. The median estimate represents a 12.38% upside compared to the closing price of $355.92 on July 25th.

The same media also reported that 14 out of 25 surveyed investment analysts had rated Boeing Company’s stock as “Buy”, while 8 – as “Hold”.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, today’s levels of importance for the Boeing stock are presented as follows:

R1 – $356.91
R2 – $357.90
R3 (Range Resistance – Sell) – $358.89
R4 (Long Breakout) – $361.86
R5 (Breakout Target 1) – $365.33
R6 (Breakout Target 2) – $367.05

S1 – $354.93
S2 – $353.94
S3 (Range Support – Buy) – $352.95
S4 (Short Breakout) – $349.98
S5 (Breakout Target 1) – $346.51
S6 (Breakout Target 2) – $344.79

By using the traditional method of calculation, the weekly levels of importance for Boeing Company (BA) are presented as follows:

Central Pivot Point – $356.37
R1 – $360.39
R2 – $365.88
R3 – $369.90
R4 – $373.92

S1 – $350.88
S2 – $346.86
S3 – $341.37
S4 – $335.88

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