Boeing Earnings: A Coin Flip For Investors?
Boeing is scheduled to release its earnings report on Wednesday, April 23, 2025. Historically, the stock's response to earnings has been balanced. Over the past five years, Boeing has recorded a positive one-day return following earnings in 50% of cases, with a median gain of 1.7% and a maximum one-day increase of 8.7%.
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For event-driven traders, while historical data points to an equal likelihood of upward or downward movement, recognizing these patterns can be informative. Two potential strategies include:
The consensus outlook forecasts a loss of $1.28 per share on revenue of $19.9 billion this quarter, compared to a loss of $1.13 per share on $16.6 billion in revenue during the same period last year. Notably, Boeing's commercial aircraft deliveries surged to 130 in Q1, up from 83 a year ago. This jump points to solid revenue growth. However, persistent challenges and increased operating costs are expected to widen the loss for the quarter.
Beyond the numbers, investors will closely watch management's commentary on the broader economic environment, particularly regarding tariffs and rising trade tensions with China. Reports that China requested its airlines to pause Boeing deliveries in response to U.S. tariffs add uncertainty. Boeing's dependency on imported components also heightens its vulnerability to trade disruptions, which could drive up costs and reduce production efficiency.
Some key findings regarding one-day (1D) post-earnings movements:
Additional statistics for 5-Day (5D) and 21-Day (21D) post-earnings returns are illustrated in the table below.
BA observed 1D, 5D, and 21D returns post earnings
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One lower-risk approach (assuming meaningful correlation exists) is to evaluate the relationship between short-term and medium-term post-earnings returns, identify the strongest correlation pair, and trade accordingly. For instance, if 1D and 5D show a strong correlation, traders may go long for five days if the 1D return is positive. The table below presents correlation data from 5-year and 3-year periods. '1D_5D' refers to the correlation between 1-day and 5-day post-earnings returns.
Discover more about the Trefis RV strategy, which has outperformed its all-cap benchmark index (including the S&P 500, S&P MidCap, and Russell 2000), generating impressive investor returns. For a more stable investment path compared to single stocks like IBM, you might also consider the High-Quality Portfolio, which has surpassed the S&P with returns of over 91% since inception.
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