Stock Analysis

With 67.44% Earnings Growth, Did The Boeing Company (NYSE:BA) Outperform The Industry?

NYSE:BA
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Measuring The Boeing Company's (NYSE:BA) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess BA's recent performance announced on 31 December 2017 and weigh these figures against its long-term trend and industry movements. Check out our latest analysis for Boeing

How Did BA's Recent Performance Stack Up Against Its Past?

I look at the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This enables me to examine different companies in a uniform manner using new information. For Boeing, its latest earnings (trailing twelve month) is US$8.19B, which, relative to the prior year's level, has risen by a substantial 67.44%. Since these figures are somewhat nearsighted, I have created an annualized five-year figure for BA's net income, which stands at US$4.85B This shows that, generally, Boeing has been able to consistently grow its net income over the past few years as well.

NYSE:BA Income Statement Mar 21st 18
NYSE:BA Income Statement Mar 21st 18
What's enabled this growth? Let's take a look at if it is solely attributable to industry tailwinds, or if Boeing has seen some company-specific growth. In the last few years, Boeing increased its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the US aerospace & defense industry has been growing, albeit, at a muted single-digit rate of 3.06% in the prior twelve months, and 4.84% over the past five years. This means any recent headwind the industry is enduring, Boeing is relatively better-cushioned than its peers.

What does this mean?

Though Boeing's past data is helpful, it is only one aspect of my investment thesis. While Boeing has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Boeing to get a more holistic view of the stock by looking at:

  • 1. Future Outlook: What are well-informed industry analysts predicting for BA’s future growth? Take a look at our free research report of analyst consensus for BA’s outlook.
  • 2. Financial Health: Is BA’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  • 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.