377.00 -0.36 (-0.10%)
After hours: 7:59PM EDT
|Bid||377.01 x 900|
|Ask||378.00 x 1200|
|Day's range||368.50 - 378.40|
|52-week range||292.47 - 446.01|
|Beta (3Y monthly)||1.33|
|PE ratio (TTM)||21.60|
|Earnings date||24 Jul. 2019|
|Forward dividend & yield||8.22 (2.28%)|
|1y target est||415.05|
(Bloomberg) -- U.S. stocks extended weekly losses amid mounting tension in the Persian Gulf and as investors speculated the Federal Reserve will limit a rate cut to a quarter-point. Treasury yields spiked and the dollar rose.The S&P 500 Index erased gains after reports that Iran’s Revolutionary Guard Corps seized a British oil tanker in the Strait of Hormuz amid soaring tensions in one of the world’s critical energy chokepoints. President Donald Trump said he’ll be “working with the U.K.”“Clearly the market values certainty and any conflict in the Middle East -- especially one which could restrict the flow of oil and goods throughout the world -- would be a negative for the global economy and stocks,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “That’s why the market sold off on the news.”Traders on Friday rushed away from bets that the Fed will slash rates by a half-point this month, a day after clamoring for them. James Bullard, one of the most dovish members of the U.S. central bank, favors a cut by a quarter point in July. The Fed “must stop with the crazy quantitative tightening,” Trump said on Twitter. Trade tensions also remained in focus, with Trump saying the U.S. has had conversations with Chinese representatives.In company news, American Express Co. slid as spending on cardholder rewards soared, while Boeing Co. rallied after a $4.9 billion charge on the grounding of the 737 Max jets met some expectations.These are the main moves in markets:StocksThe S&P 500 fell 0.6% to 2,976.61 as of 4 p.m. New York time.The Dow Jones Industrial Average lost 0.3% and the Nasdaq-100 Index slid 0.9%.The Stoxx Europe 600 Index rose 0.1%.The MSCI Asia Pacific Index surged 1.2%.CurrenciesThe Bloomberg Dollar Spot Index rose 0.4%.The euro decreased 0.5% to $1.1219.The Japanese yen slid 0.4% to 107.72 per dollar.BondsThe yield on 10-year Treasuries rose two basis points to 2.05%.Germany’s 10-year yield fell one basis point to -0.32%.Britain’s 10-year yield dipped three basis points to 0.734%.CommoditiesThe Bloomberg Commodity Index rose 0.6%.West Texas Intermediate crude climbed to $55.63 a barrel.\--With assistance from Adam Haigh, Laura Curtis, Samuel Potter, Namitha Jagadeesh, Todd White and Nancy Moran.To contact the reporters on this story: Rita Nazareth in New York at email@example.com;Vildana Hajric in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investing.com – What started as a solid stock market rally Friday was mostly wiped out by rising tensions in the Persian Gulf.
(Bloomberg) -- Boeing Co. rose the most in a month as its revelation of a $4.9 billion accounting charge provided the first glimpse of how the beleaguered 737 Max is weighing on company finances. Investors were relieved the damage wasn’t worse.The after-tax writedown, equivalent to $8.74 a share, covers potential concessions for airline customers who have been forced to cancel flights and line up replacement aircraft as the Max’s grounding enters its fifth month, Boeing said in a statement late Thursday. The costs will clip $5.6 billion from revenue and pretax earnings in the quarter.The assumptions behind the accounting charge also outlined Boeing’s recovery plan for its top-selling jet, which crashed twice in a five-month span, killing 346 people and engulfing the U.S. planemaker in one of the worst crises of its century-long history. The company said its best estimate is that the Max will be approved for flights in the U.S. and other countries beginning “early in the fourth quarter.”“We believe the initial investor reaction is a sigh of relief,” Ken Herbert, an analyst with Canaccord Genuity, said Friday in a note to clients. Boeing’s timeline for resuming Max flights tamps down speculation of an extended delay that would force a second cut to 737 output, he said.“The production rate appears to be holding at 42/month, and the charge helps to put a perceived limit on the financial impact of the grounding,” Herbert said.Boeing climbed 3.5% to $373.85 at 11:35 a.m. New York, the biggest gain on the Dow Jones Industrial Average. Spirit AeroSystems Holdings Inc., which supplies Max airframes to Boeing, jumped 7.1% to $78.61.While Boeing warned that the timing of a return to service could change, the estimate of fourth-quarter approval was in line with recent schedule changes by the model’s U.S. operators. United Airlines Holdings Inc., American Airlines Group Inc. and Southwest Airlines Co. have removed the plane from their schedules through early November.The fourth-quarter time frame also rebuts a recent Wall Street Journal report suggesting that initial flights would slip to 2020. While Boeing had been overly optimistic with earlier predictions for recertifying software linked to the crashes, “I have to think they are far enough along in the process that they feel they understand everything the FAA needs,” said George Ferguson, an analyst with Bloomberg Intelligence.Boeing’s calculations also assume that monthly production of its 737 jetliners will gradually build to a 57-month rate next year, earlier than some analysts have estimated. Aircraft produced during the grounding, and already included in the company’s inventory, will be delivered “over several quarters” once the Max is cleared to fly, the company said.The $5.6 billion pretax hit in the second quarter “is higher than we would have thought. But it should be a high-end estimate,” Douglas Harned, analyst with Bernstein, said in a note to clients Friday.The compensation will be spread over several years and may take on different forms that don’t necessarily affect Boeing’s near-term cash, he said. The manufacturer can offer changes in delivery slots, support services and discounts on future aircraft purchases.Boeing’s first-quarter profit margins were dented by $1 billion in estimated costs after it cut factory output of the narrow-body jets following the global grounding. That expense has grown by another $1.7 billion, primarily due to a “longer than expected reduction in the production rate,” the company said.Profit PressureThe higher costs will reduce the margin for the 737 program, Boeing’s largest source of profit and revenue, in the second quarter and future quarters. The company is slated to report results on July 24.More than 500 of the aircraft are stored around the globe, including about 150 newly built models that Boeing can’t send to airlines while Max flights are halted. But the volume of stored aircraft will continue to swell, amplifying the challenge for Boeing and disruption for airlines and lessors.Canaccord Genuity’s Herbert estimates that by early 2020, when deliveries should be moving into high gear, Boeing will have about 425 Max in inventory.“This is a defining moment for Boeing,” Chief Executive Officer Dennis Muilenburg said in the statement. “The Max grounding presents significant headwinds and the financial impact recognized this quarter reflects the current challenges and helps to address future financial risks.”\--With assistance from Christopher Jasper.To contact the reporter on this story: Julie Johnsson in Chicago at firstname.lastname@example.orgTo contact the editors responsible for this story: Brendan Case at email@example.com, Tony RobinsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Production cut, delay in return to service as well as lower delivery volumes for 737 Max jets are likely to impact Boeing's (BA) earnings and revenues in second-quarter 2019.
(Bloomberg) -- Shares of Boeing Co. rose more than 2.5% in early trading in New York after a $4.9 billion charge on the grounding of the 737 Max jets met some expectations on the Street.The charge “is a positive”, and met Morgan Stanley analyst Rajeev Lalwani’s expectations. Lalwani was also optimistic about the tentative promise of the jetliners’ return to the skies ahead of some investors estimates, as well as the 2020 production goals, he told clients in a research note.As one of Boeing’s biggest bulls, with a buy rating and a Street-high price target of $500, Lalwani expects “a re-start of the upward narrative” for the stock.Citi analyst Jonathan Raviv was more cautious, writing in a note to clients that “accounting assumptions shed some light, but it ain’t over.”Raviv called the charge neutral to positive, but added that it didn’t reflect knowledge of what steps the Federal Aviation Administration may take.Boeing shares have now recouped much of Thursday’s 2.3% decline. (updates share movement in lede and last paragraph)To contact the reporter on this story: Cristin Flanagan in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Catherine Larkin at email@example.com, Steven FrommFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Northrop Grumman (NOC) expects to incur lower interest expenses for the rest of 2019, starting from second quarter. This in turn should drive its bottom line.
(Bloomberg Opinion) -- Boeing Co.’s willingness to put a price tag on its 737 Max crisis and set a firmer timeline for the plane’s return is a sign it sees those troubles as closer to being resolved. The risk is that the company is still the most optimistic one in the room.Boeing late Thursday announced it would take a $4.9 billion after-tax charge in the second quarter to reflect its estimate of compensation owed to airlines that have had to scramble to adjust schedules as the Max’s grounding enters its fifth month. That estimate is based on an assumption that regulators will begin approving the Max’s return to service in the fourth quarter and that Boeing doesn’t have to make additional cuts to its production rate. This is a contrast to Boeing’s April earnings update, when it suspended full-year guidance and declined to provide a timeline for the Max’s return. It could have just reiterated that sense of uncertainty this go-around. The fact that it didn’t is likely a big reason why the stock is up in early trading.Relative to the $36 billion in market value Boeing has lost since the second fatal crash of its best-selling airplane, the charge and the $5.6 billion it will shave off of revenue and pre-tax earnings in the quarter don’t seem all that steep. Boeing separately said the slowdown in production would result in $1.7 billion of additional costs in the second quarter. That’s on top of a $1 billion hit to margins in the first quarter. These numbers don’t include the cost of legal settlements with the victims’ families, nor the $100 million Boeing has pledged for the “education, hardship and living expenses” of impacted families and economic development of affected communities.(1) But all in all, it feels financially manageable for Boeing. The big swing factor is whether Boeing is right that the planes will be able to fly again before the end of 2019.Time and time again during the Max crisis, Boeing has been on the wrong side of conservatism. The two fatal crashes were linked to flight software that was added to help adapt the 737 design to accommodate new, more fuel-efficient engines, raising prickly questions about whether Boeing rushed development of the plane to better compete with the success of Airbus SE’s A320neo family. Boeing and the Federal Aviation Administration were among the last to support a grounding of the plane, playing catch-up to regulators from China, Europe and elsewhere. Boeing initially said it would have the final paperwork for a Max fix to the FAA by the end of March. Since then, Boeing has been tripped up by a string of negative headlines, including reports that warning alerts tied to the flight software system in question weren’t operational on all planes as promised. The FAA has since ordered a separate fix to a microprocessor that can get overwhelmed by data in certain situations.Some Federal Aviation Administration officials and pilot-union leaders believe the Max is unlikely to fly again until 2020, given the time needed to make all the fixes and coordinate with international regulators, according to the Wall Street Journal. Transportation Secretary Elaine Chao reiterated on Thursday that the regulator has no timeline for returning the Max to the skies and won’t act until it’s sure the plane is safe. Ryanair Holdings Plc CEO Michael O’Leary this week said he thought it would be prudent to plan for as late as a December return of the Max. The airline is planning to take delivery of only 30 additional Max jets in time for 2020’s peak summer travel season, down from an original target of 58, forcing it to pare growth plans.Part of the problem is that Ryanair can only take six or eight new jets per month. It’s a microcosm of the inherent difficulties in clearing out the Max inventory that’s piled up at Boeing’s factories, so much so that jets are now being stored in employee parking lots. Even with a fourth-quarter return of the Max, that makes me highly skeptical of the company’s assumption that it can not only get back to its pre-crisis production pace of 52 planes per month in 2020, but accelerate that further to 57 jets.The odds of Boeing’s second-quarter charges being merely a starting point for the financial toll of the Max crisis are high.(1) I have to agree with the father of the Ethiopian Airline crash victim who called this $100 million cash pile “a PR stunt.” However well-intentioned as Boeing may be, it feels unseemly.To contact the author of this story: Brooke Sutherland at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Between production inefficiencies, customer compensation, payments to victims' families, and regulatory penalties, Boeing will pay a big price for the 737 MAX's safety problems.
With one of the most diverse economies in the nation, Chicago's metro area is a key player in multiple investing sectors. Here's how to invest in Chicago stocks.
Investing.com - U.S. futures rose on Friday, after a speech from New York Federal Reserve President John Williams boosted hopes for a half-point cut in interest rates from the central bank at the end of the month.
Microsoft and CrowdStrike Holdings report their latest quarterly figures, and Boeing prepares for a stiff headwind to its Q2 results.
Lockheed Martin's (LMT) second-quarter 2019 results are likely to benefit from the company's improved segment operating profit and solid revenue growth trends.
Boeing will take a $4.9bn after-tax charge in the second quarter related to the grounding of the 737 Max, the manufacturer’s first estimate of the cost of compensating airlines for schedule disruptions and delays in aircraft deliveries. Boeing is facing, with its fastest-selling jet grounded worldwide and unlikely to resume flying until the end of this year or even later. The nearly $5bn charge does not include less tangible cost to Boeing’s reputation, which has taken a hit as it has repeatedly revealed new problems with the plane, and delays in getting it fixed to return safely to the air.