Airlines around the world are updating their fleets with new, more fuel-efficient planes, and that's good news for aircraft maker Boeing Co.
The Chicago company said Wednesday that first-quarter profit soared 58 percent, beating analysts' expectations, as sales at its commercial airplane division surged. Even its defense business grew, although much more slowly.
Boeing delivered 137 commercial airplanes in the quarter, winning bragging rights over European rival Airbus, which had 131 deliveries. Much of the demand came from emerging markets, said Chairman and CEO W. James McNerney Jr.
Boeing's backlog rose, partly on orders for a new, more fuel-efficient version of its venerable 737 jetliner. McNerney said the company was focused on profitably boosting commercial airplane production and delivery rates.
The company's stock price rose $3.93, or 5.4 percent, to close at $77.14 on twice the normal trading volume. Before Wednesday, shares had been flat in 2012.
Boeing earned $923 million, or $1.22 per share, in the first quarter, compared with $586 million, or 78 cents per share, a year earlier. Excluding a gain from settling litigation, the company earned $1.11 per share, beating analysts' expectations of 96 cents.
Revenue rose 30 percent, to $19.4 billion, topping analysts' forecast of $18.5 billion.
The gains were driven by strength in sales of commercial airplanes, which trumped slow growth in the defense business. Boeing's 137 deliveries compared with 104 commercial planes delivered in the first quarter last year.
The company's commercial-plane backlog increased to $308 billion and had more than 300 orders for the 737 Max jetliner, which is expected to be ready in a few years to compete with the A320neo being developed by European rival Airbus. Both are single-aisle planes designed for short and medium-length flights and are more fuel-efficient than current models. That's important, with spot prices for jet fuel nearly tripling in the last three years.
In all, Boeing said it now has orders to build more than 4,000 commercial planes. The company did not comment on recent reports that it may be close to winning a big order from United Airlines. United has declined to comment.
Boeing added about 11,000 workers last year as it prepared to speed up production of commercial planes, including its new 787 jetliner in South Carolina. It had 171,700 employees at the end of 2011.
Spokesman Chaz Bickers said the company did not expect to increase its workforce in 2012.
Maxim Group LLC analyst Ray Neidl said the increase in deliveries showed that Boeing "is beginning to ring the cash register on its solid order placement." He predicted that orders will continue to rise for both small and large commercial jetliners.
Boeing's reputation suffered in recent years as the company fell behind schedule developing the 787, a long-range plane made with composite materials for less weight and better mileage. It also slipped in its production of an updated 747 jet. Those setbacks fed skepticism about Boeing's ambitious plans to boost production rates of several models, but concern may be easing.
"I'm increasingly confident that they can hit their target of 10 (787s) a month by late next year," said Citigroup analyst Jason Gursky. This week, a new assembly line in South Carolina will produce its first 787, joining the line in Everett, Wash. Gursky said he saw "no weak links" among Boeing's parts suppliers either.
First-quarter revenue from commercial planes jumped 54 percent, to $10.94 billion, while revenue from defense and space work grew just 8 percent, to $8.23 billion, reflecting tighter government budgets. The company said defense revenue was helped by about $800 million because of the quicker-than-expected start of a contract with Saudi Arabia for F-15 fighter jets.
The backlog of military planes grew 20 percent to $72 billion on orders for F-15s and C-17 cargo planes. Much of the increase came from orders placed by foreign governments, analysts said.
Boeing raised its profit forecast for 2012 because it expects to set aside less money for litigation. The company predicted it will earn between $4.15 and $4.35 a share this year, up from a January forecast of $4.05 to $4.25. The new figure is still below the $4.48 per share that analysts expect.
Gursky said Boeing was being conservative by not raising its 2012 forecast more. He said the company was probably holding back because of potentially higher roll-out costs for the 787 and recent tornado damage at Spirit AeroSystems, a supplier in Wichita, Kan.
McNerney said Boeing considered the tornado damage "manageable." Spirit makes parts of the fuselage of several Boeing planes including the 787, which Boeing calls the Dreamliner.