NEW YORK (Reuters) - Boeing Co <BA.N> reported a greater-than-expected 38 percent jump in first-quarter profit on Wednesday as increased deliveries of its commercial planes offset a dip in military sales, and manufacturing operations became more efficient.
By Bill Rigby
NEW YORK (Reuters) - Boeing Co <BA.N> reported a greater-than-expected 38 percent jump in first-quarter profit on Wednesday as increased deliveries of its commercial planes offset a dip in military sales, and manufacturing operations became more efficient.
The Chicago-based company, which vies with EADS <EAD.PA> unit Airbus in the lucrative jetliner market, kept its full-year profit target unchanged and forecast next year's earnings in line with Wall Street estimates, despite problems getting its new 787 Dreamliner in the air.
Boeing, which is also the Pentagon's No. 2 supplier, reported quarterly profit of $1.2 billion, or $1.62 per share, compared with $877 million, or $1.13 per share, a year earlier.
!ADVERTISEMENT!The results easily beat Wall Street's average earnings forecast of $1.36 per share, according to Reuters Estimates.
Boeing shares rose 2.7 percent to $80.71 in early New York Stock Exchange trading. At Tuesday's close, they had fallen 27 percent since last July, dogged by 787 delays.
"It's pretty amazing they beat consensus by 20 percent," said Paul Nisbet at aerospace specialists JSA Research. "The high rate of operating margin was a big jump -- the volume is beginning to pay off. With the high demand for aircraft, they are getting good prices."
Operating margin at the commercial plane unit jumped nearly 3 percentage points to 12 percent, as Boeing's massive manufacturing operations became more efficient as the company works through a record order book. Its defense unit operating margin rose slightly to 11.4 percent.
Boeing now has an unprecedented $271 billion worth of commercial planes on its order book, pumped up by a three-year boom in aircraft sales. It also has $75 billion worth of defense orders.
SEES MORE PROFIT IN 2009
Overall first-quarter sales rose 4 percent to $16 billion, as more commercial plane deliveries offset a dip in defense revenue. Analysts on average were expecting $16.6 billion.
Sales at Boeing's commercial plane unit rose 8 percent to $8.2 billion, powered by an 8 percent increase in plane deliveries to 115.
Boeing's defense unit, which is the U.S. No. 2 defense contractor behind Lockheed Martin Corp <LMT.N>, posted a 2 percent drop in revenue to $7.6 billion, hurt by lower deliveries of military aircraft.
The unit lost out to rival Northrop Grumman <NOC.N> and its partner EADS in a $35 billion refueling tanker program for the U.S. Air Force in February, but it is protesting the award.
Boeing held its earnings forecast of $5.70 to $5.85 per share for the full year, below the analysts' average outlook of
$5.95.
For next year, it forecast earnings of $6.80 to $7 per share, in line with analysts' expectations of $6.96.
Wall Street has been forced to tone down its hopes for Boeing's profit next year due to repeated delays on the highly anticipated, fuel-efficient 787.
The company had originally planned to deliver 112 of its 787s by the end of 2009, but has scaled that back to 25 after three major delays pushed the program 15 months behind schedule.
Boeing said on Wednesday that it was sticking to the latest targets, issued two weeks ago, despite continuing problems with slower-than-expected completion of work from its suppliers and unexpected reworking on parts of the plane.
The company held its latest target of first flight in the fourth quarter of this year and first delivery in the third quarter of next year. The first 787 was originally scheduled to be handed over to Japan's All Nippon Airways <9202.T> next month.
Boeing's commercial planes unit repeated its forecast of delivering 475 to 480 planes this year, and set a target of 500 to 505 planes next year, including the 25 787s.
(Editing by Maureen Bavdek and Lisa Von Ahn)
