Diamonds and Dogs

10/23/19

Bad earnings, good stock action. Boeing (BA) is up 2% and up 5% in the last two days following pretty bad earnings. Boeing missed by 67 cents, sales fell 20%, the company only delivered 62 planes verse 190 planes in the quarter last year. Cash flow came in at a negative two billion, costs related to the 737 Max rose by $900 million in the quarter and total debt rose to $24 billion, but the stock is higher on optimism that the 737 Max could be cleared to fly before the end of the year. The FAA has not divulged a timeline for the plane to return to service, and the three U.S. airlines that fly the jet have pulled it from their schedules through mid-January. Boeing also said Tuesday it plans to gradually increase the 737 Max production rate from 42 per month to 57 per month by late 2020.

At least one chip stock not performing well. Texas Instruments (TXN) is down 6% to a four-month low after missing earnings estimates. Revenues fell 11.5% year over year to $3.77 billion below estimates. Texas Instruments also lowered guidance for the four-quarter seeing weakness in in most markets. Analog revenue declined 8% and Embedded Processing declined 19%. TI also received at least three downgrades.