BOEING TURNED in a stronger than expected quarterly profit yesterday as the company was able to ramp up production to meet rising demand.
Shares in Boeing, which makes commercial aircraft and military products, gained more than 3.8 per cent to $76.02 after the company raised its earnings forecast for the year.
Boeing raked in orders while accelerating production on all its commercial aircraft programmes. The achievements helped erase concerns in the industry about Boeing’s credibility, which was tarnished in the last decade by problems bringing the long-overdue 787 Dreamliner to market.
“Investor confidence is with the company,” said Alex Hamilton, managing director of EarlyBirdCapital. He noted, in particular, a recent production rate increase for the 787 Dreamliner to 3.5 per month from 2.5 per month as evidence the company can hit a target of ten 787s per month by the end of next year.
Some aerospace experts, including Mr Hamilton, have said that target is ambitious, given the past glitches in the sprawling global supply chain that feeds that programme.
Boeing’s first-quarter net profit rose to $923 million, or $1.22 per share, from $586 million, or 78 US cents per share, a year earlier. Boeing’s earnings were helped when a California appeals court threw out a $775 million lawsuit against the company over launch and satellite contracts. Boeing had been setting money aside in case of an unfavourable ruling. The outcome made this unnecessary.
Excluding a gain related to that, earnings were $1.11 per share, beating the analysts’ average estimate.
The company, which competes with EADS unit Airbus for orders, said revenue rose 30 per cent to $19.4 billion, topping expectations for $18.4 billion. Boeing said its order backlog at the end of the quarter was $380 billion, up from $356 billion in January.
Boeing raised the upper end of its 2012 profit forecast to $4.35 a share from $4.25 while keeping the low end at $4.15. Its revenue outlook of $78 billion to $80 billion was unchanged.
Revenue at the commercial unit increased 54 per cent to $10.9 billion. – (Reuters)
