Boeing Co. rode an 18 percent surge in revenue from its defense contracting unit to a far-better-than-expected $623 million profit in the first quarter and raised its earnings estimates for 2004 and 2005.
The impressive showing reflects continued strength in Boeing's military business and the strongest signs yet of an emerging recovery in the slumping commercial-airplane industry.
Net income reported Wednesday amounted to 77 cents a share, compared with a net loss of $478 million, or 60 cents a share, for the first quarter of 2003.
The company's per-share earnings, which got a 12-cent boost from interest from a federal tax refund, shattered Wall Street's estimates as Boeing had indicated would be the case in a brief statement last week. Analysts surveyed by Thomson First Call had pegged earnings at 44 cents per share.
Revenues were $12.96 billion, up 6 percent from $12.26 billion in the same period a year earlier.
The defense and space unit accounted for 57 percent of revenue, or $7.4 billion, led by a 13 percent jump in sales of military aircraft and weapon systems.
The once-dominant commercial airplanes business saw modest gains in both deliveries, up to 76 from 71 a year earlier, and revenues, up 6 percent to $5.33 billion. CEO Harry Stonecipher noted the Seattle-based jet unit was "generating solid profitability at the bottom of the commercial airplane cycle," with operating earnings of $352 million.
"It is well positioned for growth as the market recovers," Stonecipher told analysts on a conference call.
The company earlier this week announced the final go-ahead for the 7E7 airplane, its first new jet in more than a decade.
Boeing, which last year fell behind rival Airbus in commercial airplane manufacturing for the first time, said it now anticipates deliveries to improve to 300 in 2005, up from approximately 285 this year, and boosted its revenue estimate by $2 billion to a range of $57 billion and $59 billion.
It raised its guidance for 2004 earnings by 30 cents per share, to a range of between $2.05 and $2.25 per share. The First Call consensus estimate was $1.85. For 2005, Boeing now pegs earnings at between $2.20 per share and $2.45 per share -- up 25 cents from its previous guidance.
Boeing shares rose 63 cents to $44.18 in morning trading Wednesday on the New York Stock Exchange, just off a two-year high of $45.10.