UPDATE 4-Boeing profit tops forecasts; shares up on outlook

Wed Jan 27, 2010 2:31pm EST

* Net profit $1.75/shr

* Ex items profit of $1.77/share vs $1.36/share est

* Shares rise more than 5 percent (Recasts; Adds analyst comment, updates shares)

By Kyle Peterson

CHICAGO, Jan 27 (Reuters) - Boeing Co (BA.N), the world's second-largest plane maker, posted a stronger-than-expected quarterly profit on Wednesday, vaulting shares higher as investors took comfort in signs that 2010 would be a better year for the company than 2009.

Chicago-based Boeing, which suffered a drop in orders for its airplane last year as well as military budget cuts, predicted a profitable 2010.

Shares of Boeing, a Dow component, gained more than 5 percent on the New York Stock Exchange, even as the Standard & Poor's 500 Index .SPX fell 0.47 percent.

"The key take-away here is that there was not really negative news coming out of the report," said Brian Nelson, an analyst at Morningstar.

"The market is thinking that the things are turning the corner," Nelson said. "We're looking at a better 2010 for Boeing."

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For a graphic on Boeing's earnings, click on: link.reuters.com/nab26h ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Boeing and its top rival, Airbus EAD.PA, were dogged in 2009 by fewer orders for airplanes as carriers around the world grappled with falling travel demand in the sagging economy. Meanwhile, Boeing's defense unit struggled with sweeping government budget cuts.

"There's definitely some challenges. But I think coming off a year where you had almost a perfect storm, they performed very well," said Alex Hamilton, an analyst at Jesup & Lamont.

The company forecast a profit of $3.70 to $4 per share in 2010, which reflects the 777 production rate reduction and reduced scope on Army modernization and missile defense programs. Wall Street analysts expected the company to earn $4.26 per share in 2010 on revenue of $65.42 billion.

Boeing said it anticipates 2010 revenue of $64 billion to $66 billion, and expects that 2011 revenue will be higher than 2010's.

Chief Executive Jim McNerney said in a statement that Boeing generated "solid core operating performance" in 2009.

"Focus areas for 2010 are to continue our strong operational performance, certify and deliver the 787 and 747-8, and further reposition our defense, space and security business," McNerney said.

Boeing shares were up 5.1 percent, or $2.96, at $60.64 in afternoon trading.

FOURTH-QUARTER PROFIT

Boeing reported a quarterly net profit of $1.27 billion, or $1.75 per share, compared with a year-earlier loss of $86 million, or 12 cents per share. The year-ago loss was partly caused by a 2008 labor strike.

Excluding one-time items, Boeing reported a quarterly profit of $1.77 per share, compared with a Wall Street consensus estimate of $1.36 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 42 percent to $17.9 billion.

Boeing Commercial Airplane reported earnings of $1 billion, compared with a loss of $968 million a year ago. Revenue in the quarter rose to $9.2 billion, up from from $4.6 billion.

Boeing said this month that orders fell 61 percent to 263 commercial airplanes in 2009, amid a steep decline in air travel and freight transport.

"In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen," Giovanni Bisignan, CEO of the International Air Transport Association, said in a statement on Wednesday.

Boeing Defense, Space & Security reported earnings of $829 million, compared with $881 million a year earlier, and revenue of $8.5 billion compared with $8 billion a year ago.

Boeing reiterated that it will complete testing on its long-delayed 787 Dreamliner in time to make its first delivery in the fourth quarter. The revolutionary, lightweight plane had its first flight in December -- more than two years behind schedule.

The company also said it had no plans to cut production on its hot-selling 737, as some experts had expected. (Reporting by Kyle Peterson, editing by Maureen Bavdek)

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