Boeing shares hit new high on quarter's strong results

CHICAGO — Boeing shares traded at an all-time high Wednesday after the airline maker posted its largest profit in 3 ½ years, earning nearly $1.1 billion in the second quarter as it continued to pound away at its European rival Airbus.

The better-than-expected results — the company's strongest since the fourth quarter of 2003 — easily beat Wall Street forecasts and sent Boeing's stock up more than 3 percent.

"We continued to make solid progress across all of our businesses during the quarter," said Chairman and CEO Jim McNerney.

For the April-June period, the Chicago-based airplane maker said its profit amounted to $1.05 billion, or $1.35 per share. That compared with a loss of $160 million, or 21 cents a share, a year ago, when the company was bogged down by the legal costs of a government investigation.

Second-quarter revenue climbed 14 percent to $17 billion, from $15 billion, soaring past Wall Street expectations.

On average, analysts surveyed by Thomson Financial forecast earnings per share of $1.16 and $16.2 billion in revenue for the Chicago-based company during the period.

Boeing shares jumped $3.43, or 3.3 percent, to close at $107.23 Wednesday after reaching a high of $107.83.

The world's No. 2 maker of commercial planes behind Airbus is on pace to overtake its European competitor in deliveries by early next year on momentum from the 787 Dreamliner, which has 683 firm orders from nearly four dozen customers to date.

Boeing said it was working to address issues related to delivery of the massive aircraft but expects the plane will get to customers on time in May 2008.

To ensure that, the aviation company said it was boosting its forecast for 2007 research and development expenses to $3.7 billion — up from a range of $3.2 billion to $3.4 billion — as it works to keep the 787 on schedule.

"We continue to be a bit over where we want to be on weight but we remain confident that we will deliver the unprecedented operating efficiency that our customers expect," said Chief Financial Officer James Bell. "We're devoting additional resources to ensure that our development programs stay on schedule."

Even with added expenses, Boeing said it would raise its 2007 guidance, based on its growth and strong airplane business.

The company said it expects to earn between $4.80 and $4.95 per share on revenue of $65 billion.

"Although the increase to R&D will not go unnoticed today, we think that the solid operational performance, raise to guidance and continuing strength in commercial demand should be generally well received by investors," Banc of America Securities analyst Robert Stallard wrote in a research note.

Boeing's commercial aircraft division saw its second-quarter deliveries grow 18 percent to 114, up from 97. The division's revenue grew 22 percent to $8.7 billion while earning $960 million.

Boeing's integrated defense system earned $854 million and the company's backlog reached a record $279 billion.

It reaffirmed its 2008 guidance of $5.55 to $5.75 per share on revenue of $71 billion to $72 billion.