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Boeing (BA +3%) is enjoying a pretty nice lift off today despite some turbulence with its Q4 report this morning. Some investors may be surprised to see the stock trading higher despite a sizeable EPS/revenue miss. However, it makes sense if you understand the market sentiment around what has been happening.

Let's take a look at the main points from the earnings report:

• Boeing reported a huge loss at $(2.33) per share.
  • A big loss was expected but this was $0.50 worse than consensus.
  • Revenue fell 36.8% yr/yr to $17.91 bln, which also was well below consensus.
• Financial results continue to be significantly impacted by the 737 MAX grounding.
• Commercial Airplanes segment revenue fell 55% yr/yr in Q4 to just $7.46 bln, reflecting lower 737 deliveries.
• The MAX is rightly grabbing most of the headlines, but its 787 program is also struggling a bit.

So why is the stock trading higher on these seemingly bad results? We think it's because:

1. A big loss was expected anyway.
2. The mid-2020 MAX timeline was not pushed back further.
3. The dividend was not cut or suspended as some have speculated it might have been.
4. The stock fell 16% over the past two months, so a lot of bad news was priced in.

This was the first earnings report for new CEO David Calhoun, who took over as CEO on January 13 following the resignation of CEO Dennis Muilenburg. Mr. Calhoun appeared on CNBC this morning and seemed candid and transparent, which the market seems to have found reassuring after Boeing had been criticized for being overly optimistic on the MAX issue in 2019.