Earnings Review and Preview: The Boeing Company (BA) and Amazon.com (AMZN)

The S&P 500 and Dow both celebrated wave after wave of better-than-expected fourth-quarter results last week. This week brings us another round of earnings announcements, and one of the reports was so impressive the stock market surged on its results. That report came from The Boeing Company (BA), which released its numbers Wednesday morning.

First, during the fourth quarter, revenue jumped 14% year-over-year to $28.3 billion, up from $24.8 billion in the same quarter a year ago. Analysts were expecting revenue of $26.87 billion.

Fourth-quarter operating earnings soared 49% year-over-year to $3.87 billion, or $5.48 per share, compared with $2.59 billion, or $5.07 per share, in the fourth quarter of 2017. The Street view was for $4.58 per share, so Boeing posted a 19.7% earnings surprise.

Boeing also set a new revenue record for fiscal year 2018, reporting $101.1 billion. That represented 8% annual revenue growth. Full-year earnings per share were $8.91 billion, or $12.33 per share. Company management also noted that it paid $3.9 billion in dividends during the year.

Looking forward to fiscal year 2019, Boeing expects revenue between $109.5 billion and $111.5 billion, and earnings per share between $19.90 and $20.10. The company also anticipates that it will deliver between 895 and 905 commercial aircraft this year, or an 11% to 12.3% increase over the 806 aircraft delivered in 2018.

Clearly, 2018 was a stunning year for Boeing, and the company expects 2019 to be even better. Boeing remains one of my favorite dividend growth stocks. In fact, BA earns a solid B-rating from both Dividend Grader and Portfolio Grader. So it remains a good buy on dips.

Now, tomorrow, we’ll hear from Amazon.com (AMZN) after the close—and I wouldn’t be surprised if it’s another market-moving report.

Amazon’s earnings are expected to come in at $5.67 per share, up a whopping 162.5% from the $2.16 per share earned a year ago. For revenue, analysts are looking for an 18.9% year-over-year increase to $71.87 billion. The analyst community has raised earnings estimates over the past three months, which is a good indicator of a fifth-straight quarterly earnings surprise.

Given the strategic moves company management has made over the past months, I’m expecting a strong report on Thursday. The company introduced Amazon Document DB, which is a document database service. This move should broaden the Amazon Web Services’ (AWS) database service portfolio, as it expands its non-relational database service offerings.

It will also allow consumers to stream movies and television shows through IMDb, its film and television website business. This will give Amazon a more competitive edge in the crowded streaming space. Plus, the company also partnered with VCAAnimal Hospitals, which will use AMZN’s Alexa for pet management. This is another good deal for Amazon, as it gives it an opening into the pet healthcare space. According to Grand View Research, that market is expected to reach $64.6 billion by 2025. That’s a lot of growth for Amazon to take advantage of.

This is a big company, and solid results could be just what the stock market needs to fuel its recent move higher. AMZN receives top marks in Portfolio Grader, so it remains an A-rated buy in my book.

To stay on top of my latest stock ratings, plug your holdings into Portfolio Grader, my proprietary stock screening tool. You may get started here.

Sincerely,

Louis Navellier

Louis Navellier

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