Boeing hikes 2011 outlook as profit soars

The world's second-largest aircraft maker, after European rival Airbus, also confirmed its delay-plagued new airplanes -- the 787 Dreamliner and the jumbo 747-8 Freighter -- were on schedule for first deliveries.

But it cut back its full-year maximum forecast for commercial aircraft deliveries to 495 from 500, citing lower planned shipments of the 787 and 747-8 aircraft.

Boeing reported net profit of $941 million, compared to $787 million in the 2010 second quarter.

Shares in Boeing, a Dow component, pared gains to close 0.7 per cent higher at $70.63 in New York, bucking a steep 196-point drop on the blue-chip index.

"Strong operational performance drove double-digit margins at both of our major businesses and produced outstanding results in the quarter," Jim McNerney, Boeing chairman, president and chief executive, said in a statement.

Boeing's Defense, Space & Security segment posted a 12 per cent rise in earnings from operations, to $798 million.

The Chicago-based company hiked its 2011 earnings per share forecast to between $3.90 and $4.10 per share, while estimates for revenue and cash flow were left unchanged.

"Our outlook for the year has strengthened as our team continues its relentless focus on productivity improvement, cash management and program execution," McNerney said.

Second-quarter revenues rose 6.0 per cent from the year-ago quarter, to $16.5 billion, the company said in a statement.

Earnings per share of $1.25 were 18 per cent higher than a year ago and widely beat the average analyst estimate of 96 cents.

McNerney said the company had made "major progress" toward certification and delivery of the new 787 Dreamliner and 747-8 Freighter this year and continued "disciplined" increases in commercial airplane production rates.

Boeing said flight testing activities on the two aircraft are nearing completion and deliveries are expected later in the third quarter.

US Federal Aviation Administration certification of the 787 is expected "before the end of August," McNerney said in a conference call.

He said the company was prepared to increase 787 production from a current average of two a month to 2.5 a month "later this year" to meet total orders of 827 of the aircraft -- eight lower than it had reported the previous quarter.

On July 20, American Airlines ordered 200 of the company's best-selling 737s, which Boeing said it would equip with a new, more fuel-efficient engine.

McNerney said the decision to re-engine the plane, instead of waiting to build an all-new plane, had been market-driven.

A new airplane by 2019 presents "more risks," he said. The marketplace "is highly valuing efficiency today versus more efficiency tomorrow."

Analysts say the fact that Boeing lost its monopoly on the AA fleet to European rival Airbus helped to force the decision.

Airbus picked up 260 orders for its A320 jets from AA in the largest order in aviation history.

Boeing lowered its planned 2011 deliveries of 787s and 747-8 planes to no more than 30 units, down from 40 units.

Boeing's long-haul 787 Dreamliner, which the company says will deliver 20 per cent fuel savings, is three years behind the initial schedule due to snags in the production line.

The 747-8 is a longer and more fuel-efficient update of Boeing's double-decker 747 jumbo jet.

Japanese airline All Nippon Airways is the launch customer for the 787; Cargolux, based in Luxembourg, will take delivery of the first 747-8 Freighter.