Boeing Jumps as Profit Beats Estimates, Outlook Raised

April 25 (Bloomberg) -- Bloomberg's Dominic Chu and Scarlet Fu report that Boeing earnings rose 58% in the first-quarter while Caterpillar topped first-quarter profit estimates and raised its full-year forecast. They speak on Bloomberg Television's "Inside Track." (Source: Bloomberg)

Boeing Co. (BA) climbed the most in eight months after the world’s largest aerospace company posted a first-quarter profit that beat analysts’ estimates and raised its 2012 forecast.

Net income rose 58 percent to $923 million, or $1.22 a share, buoyed by increased deliveries of commercial jets, Boeing said today in a statement. The shares jumped 5.3 percent to $77.08 at the close in New York, leading the advance in the Dow Jones Industrial Average.

Quarterly shipments of 137 jetliners topped Airbus SAS’s 131 as Chicago-based Boeing bids to retake the global commercial-sales title it lost in 2003. Boeing is boosting production by more than 60 percent in the four years through 2014 to pare a record order backlog.

“The results look terrific, led by the commercial aircraft side of the company,” Rick Whittington, a Drexel Hamilton LLC analyst in New York, said in a telephone interview. “Boeing has this monstrous commercial backlog and the question has been if they can get them out the door profitably, and while the jury still isn’t completely in there, the signs are looking positive.”

The first-quarter profit exceeded the 93-cent average estimate in a Bloomberg survey of 26 analysts. Sales rose 30 percent to $19.4 billion, beating the average estimate of $18.3 billion among 22 analysts.

Photographer: Duncan Chard/Bloomberg

The tailfin of a Boeing 787 Dreamliner is seen at the Dubai Air Show in Dubai. Close

The tailfin of a Boeing 787 Dreamliner is seen at the Dubai Air Show in Dubai.

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Photographer: Duncan Chard/Bloomberg

The tailfin of a Boeing 787 Dreamliner is seen at the Dubai Air Show in Dubai.

Profit Forecast

Full-year profit will be $4.15 to $4.35 a share, after a litigation-related reserve was reduced, up from the $4.05 to $4.25 projected in January.

Shrinking that reserve contributed 11 cents a share to Boeing’s earnings, according to the statement. Even without that benefit, profit still would have been “well above consensus” estimates, Douglas Harned, a Sanford C. Bernstein & Co. analyst in New York, said in a note.

Boeing reiterated its plan to deliver from 70 to 85 wide- body 787 and 747 jets this year, with the composite-plastic Dreamliner accounting for “approximately half” of the total. The company handed over five 787s in the first quarter.

Deutsche Lufthansa AG (LHA) took delivery today of a 747-8 Intercontinental, the latest passenger version of the four- engine jumbo jet. The German carrier is the first airline to get the new plane, after Boeing handed one over to an unidentified private customer on Feb. 28.

Segment Revenue

Revenue at the commercial airplane unit climbed 54 percent to $10.9 billion last quarter, while profit more than doubled to $1.08 billion. Boeing’s defense, space and security division increased profit by 11 percent to $742 million on $8.2 billion of sales.

The results marked a “very good start to 2012 by Boeing, with better-than-expected operating performance in both divisions,” Robert Stallard, an RBC Capital Markets analyst in New York, wrote in a note to clients.

“If Boeing can continue to execute, then we think there is the potential” for further increases in the full-year forecast, wrote Stallard, who rates the shares as outperform. Harned has a market perform rating on the stock, while Drexel Hamilton’s Whittington recommends Boeing as a buy.

Boeing’s commercial backlog rose 4.1 percent to $305.3 billion as of March 31 from the end of 2011.

Demand for new jetliners is “strong,” as passenger air traffic “remains resilient,” Chief Executive Officer Jim McNerney said on a conference call.

To contact the reporter on this story: Tim Catts in New York at tcatts1@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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