As I’ve been saying, we’ve been gearing up for the best earnings season of my lifetime, and as many companies are now proving, that wasn’t mere hyperbole. Over the past two days, I’ve shown you how stellar the earnings reports were for CAT and NOC. Today, I want to reveal another big blue chip that posted earnings yesterday and has seen a steady rise in its share price ever since…
The Boeing Company (BA) crushed first-quarter earnings estimates yesterday, and in turn, company management increased its fiscal year 2018 guidance. During the first quarter, Boeing made 184 commercial deliveries and its backlog increased to $486 billion, including more than 5,800 commercial airplanes. As a result, first-quarter revenues rose 6% year-over-year to $23.38 billion, compared with $21.96 billion in the same quarter a year ago. Analysts were expecting sales of $22.24 billion.
First-quarter earnings from operations jumped 30% year-over-year to $2.88 billion, while net earnings soared 57% year-over-year to $2.48 billion. Core earnings per share surged 68% year-over-year to $3.64, up from $2.17 per share in the first quarter of 2017. The consensus estimate was for earnings of $2.58 per share, so Boeing posted a stunning 41.1% earnings surprise.
Looking forward to fiscal year 2018, Boeing maintained its current sales outlook and updated its core earnings forecast. The company still expects full-year sales between $96 billion and $98 billion, or 2.8% to 4.9% annual sales growth. Full-year core earnings per share are now expected to be between $14.30 and $14.50, up from previous guidance of $13.80 to $14. Overall, Wall Street cheered the better-than-expected first-quarter report and increased full-year guidance today. BA shares were up nearly 4% yesterday morning, and the stock has continued to climb steadily higher.
On top of this news, BA maintains an A-rating in my Portfolio Grader screening tool.
When you run your holdings through this screening tool, take note of each stock’s Quantitative Grade (the current level of institutional buying pressure) and each stock’s Fundamental Grade (a weighted blend of eight financial metrics). Also check which of your stocks are rated as Conservative, Moderately Aggressive or Aggressive. Shoot to have 60% of your holdings in Conservative stocks, 30% in Moderately Aggressive and 10% in Aggressive.
I can’t stress this last point enough because aggressive stocks will be the first ones to take a beating during a correction. That’s why you want to limit your exposure to these “spicier” stocks.
To wrap up today, the best thing you can do to prepare (and to weather the current trading activity) is invest solely in companies with the best earnings prospects. And of course, the best place to start finding that information is to run your portfolio through my Portfolio Grader screening tool.