Boeing 4Q profit more than doubles

Boeing 4Q profit more than doubles

	Published : Thu, 01 Feb 2007 00:58 By : Agencies Print this Story

CHICAGO (AFX) - Record-setting commercial airplane sales and a strong defense business helped Boeing Co. smash Wall Street forecasts as the airplane maker delivered a fourth-quarter profit that was more than double its earnings of a year ago.

The company also predicted two more years of solid growth, sending Boeing shares up more than 4 percent in trading on the New York Stock Exchange.

'We made great progress in 2006, which has given us a solid foundation for even better performance in 2007 and beyond,' said Chief Executive Jim McNerney. 'This was an important year for Boeing, one in which we turned a corner and positioned ourselves for what we believe will be a very promising future.'

The Chicago-based company raised its own forecast for 2007 by 10 cents, saying it expected to earn between $4.55 and $4.75 per share on revenue between $64.5 billion and $65 billion.

Boeing expanded margins and revenue growth would help it earn between $5.55 and $5.75 per share in 2008.

For the quarter ending Dec. 31, the airplane maker's net income was $989 million, or $1.29 per share -- more than double its $460 million profit during the same period last year.

Excluding charges, one-time items and other tax gains, Chicago-based Boeing said its adjusted earnings per share for the quarter were $1.16. Fourth-quarter revenue climbed 26 percent to $17.5 billion, surpassing Wall Street expectations.

On average, analysts surveyed by Thomson Financial expected the world's No. 2 commercial airplane maker to earn 98 cents per share on $16.5 billion in revenue.

Boeing booked 1,044 net orders for new commercial planes in 2006, a record that raised its year-end backlog by 22 percent to $250 billion.

'It's way, way better than expected,' said Paul Nisbet, an analyst with JSA Research. 'It's just an amazing performance.'

For the year, Boeing said its 2006 profit fell 14 percent to $2.2 billion, or $2.85 per share, from $2.6 billion or $3.20 per share in 2005. Its 2006 revenue was $61.5 billion, a 15 percent increase from $53.6 billion last year.

Executives said the company is continuing to address issues with the supply chain and the weight of its much-anticipated 787 'Dreamliner,' which is expected to begin flight tests at the end of August.

Boeing recently scrapped plans for a wireless entertainment system in the plane after struggling with regulatory approval.

'We expect to deliver the 787 on time with first delivery in May 2008 and in accord with our contractual commitments,' McNerney said. 'As with most large development programs at this stage, we continue to work weight, supplier, and schedule challenges as we strive to meet our milestones.'

But some remained skeptical, believing there would be at least some delay on the plane that is supposed to begin scheduled service in May 2008.

'To develop a plane with that sort of technological innovation not even a couple weeks late would be unheard of,' said Morningstar analyst Chris Lozier. 'I would be extremely, positively surprised if they delivered that plane even in June of next year. I would think when push comes to shove, there will be a couple of late inning kinks that need to be worked out of the program, as you would expect.'

The company's Seattle-based Boeing Commercial Airplanes unit saw its fourth-quarter operating earnings double to $665 million from $330 million. The unit's revenue increased 37 percent to $7.6 billion, up from $5.5 billion. Meanwhile, operating margins grew nearly 3 points to 8.7 percent.

The unit delivered 103 airplanes in the fourth quarter and 398 for the year.

Boeing said it expects to deliver between 440 and 445 commercial planes this year and up to 520 in 2008.

Defense sales grew 18 percent to $9.7 billion, up from $8.2 billion during the year-ago quarter. But the segment's $1 billion profit was slightly offset by a $274 million charge for additional costs of its Airborne Early Warning & Control aircraft.

Boeing shares climbed $3.56, or 4.1 percent, to close at $89.56 on the New York Stock Exchange.