Bloomberg News

Boeing Forecast Overshadows S&P 500 Results as 77% Top Estimates

January 29, 2014

Boeing Co. 787 Dreamliner

Investors, already rattled by a slump in emerging-market assets, are turning their attention to forecasts, and sent Boeing Co.’s shares down as much as 6.6 percent after its 2014 predictions fell short of estimates. Photographer: Andrew Harrer/Bloomberg

Forecasts from Boeing Co. (BA:US) and Yahoo! Inc. (YHOO:US) disappointed investors today, overshadowing fourth-quarter earnings that beat analysts’ estimates at companies including Dow Chemical Co.

The results for last quarter pushed the ratio of Standard & Poor’s 500 Index companies that have exceeded projections so far this earnings season to 77 percent from 75 percent yesterday, according to data compiled by Bloomberg. About 330, or two-thirds, have yet to report.

Today’s earnings provided further confirmation of the accelerating profit growth last year that helped send the S&P 500 to a record. Now investors, already rattled by a slump in emerging-market assets, are turning their attention to forecasts, and sent Boeing’s shares down as much as 6.6 percent after its 2014 predictions fell short of estimates.

The Chicago-based planemaker, whose fourth-quarter earnings (BA:US) topped projections, has provided conservative forecasts over the last two years and could still reach estimates if it meets manufacturing targets, said Ken Herbert, managing director with Canaccord Genuity Inc.

“If they continue to execute, you should see nice upside,” said Herbert, who recommends buying (BA:US) the shares.

Web portal Yahoo gave a weaker-then-expected outlook as it continues to struggle amid competition from Google Inc. and Facebook Inc. (FB:US) EMC Corp., the world’s biggest maker of storage computers, also gave a disappointing forecast after fourth-quarter earnings topped (EMC:US) projections. Meanwhile, AT&T Inc. (T:US)’s 2014 profit outlook was on the low end of estimates as price competition heats up with T-Mobile US Inc. All three stocks dropped.

Bright Spots

Dow Chemical was among the bright spots. The Midland, Michigan-based company posted higher-than-expected fourth-quarter earnings as as price gains and low U.S natural gas prices widened margins at its plastics unit. The chemical maker, facing pressure from activist investor Third Point LLC, also tripled a share buyback program and raised its dividend.

Facebook and Qualcomm Inc. (QCOM:US) are scheduled to report later today, followed by 3M Co. (MMM:US), Exxon Mobil Corp. (XOM:US) and United Parcel Service Inc. (UPS:US) tomorrow.

Profit growth at S&P 500 companies probably accelerated for a third straight period last quarter to 6.6 percent from a year earlier, according to estimates compiled by Bloomberg.

In the third quarter, 74 percent of S&P 500 companies beat earnings estimates and 53 percent exceeded sales projections.

To contact the reporter on this story: Cecile Daurat in Wilmington at cdaurat@bloomberg.net

To contact the editor responsible for this story: Cecile Daurat at cdaurat@bloomberg.net


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Companies Mentioned

  • BA
    (Boeing Co/The)
    • $132.73 USD
    • 1.03
    • 0.78%
  • YHOO
    (Yahoo! Inc)
    • $51.69 USD
    • 0.44
    • 0.86%
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