Dow leader Boeing jumped 5%, set for a new all-time high with a market cap north of $200 billion, after reporting earnings that blew away expectations, bolstered by surging deliveries of the 737, the planemaker’s biggest profit-center, and an unexpectedly large one-time gain from U.S. tax cuts.
The company reported adjusted Q4 earnings of $4.80 a share, or $3.06 a share excluding the tax gain; both numbers were comfortably above the $2.90 consensus estimate. Revenue for the aircraft maker rose 8.9% to $25.4 billion, also beating the $24.7 billion analyst estimate. The company announced a $1.74 per share benefit in Q4 from the lower corporate levy and said it expects more benefits to come this year. In more good news, the tax reduction is taking effect just as the company starts to see large, taxable cash gains from its 787 Dreamliner after a decade of losses.
The company’s forecast was just as impressive:
But perhaps most importantly, in Q4 Boeing generated record operating cash flow of $13.3 billion; and repurchased 46.1 million shares for $9.2 billion
Just this January Boeing had already surged 15%, the largest gain among the 30 members of the Dow Jones Industrial Average and the biggest contributor to the index’s YTD gains. The stock has more than doubled since the start of 2017 as Boeing surpassed General Electric Co. to become the largest U.S. industrial company by market value, according to Bloomberg.
Meanwhile, the futures remain bright: in addition to its humming military business, lower taxes are combining with record jetliner deliveries to fuel the cash gush at Boeing, the biggest gainer on the Dow Jones Industrial Average last year and so far in 2018. Free cash flow was $2.47 billion in the fourth quarter, Boeing said in an earnings report Wednesday, exceeding the $1.66 billion expected.
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