Business

SEATTLE (AP) ― Boeing Co. reported a better-than-expected 29 percent jump in first-quarter profits Wednesday, benefiting from continuing momentum in its commercial airplane business and a surge in deliveries that overcame weaker results in its defense and space business.

Its stock fell, however, amid some disappointment on Wall Street that the company didn't boost its outlook. Shares declined $1.78, or 2.1 percent, to $83.33 in morning trading on the New York Stock Exchange.

Boeing, the world's second-largest commercial jet manufacturer behind Airbus SAS, said revenues from its Seattle-based airplane division leaped 48 percent thanks to 28 more airplane deliveries in the quarter than a year ago.

That more than offset lower sales and earnings from the St. Louis-based military and space unit, its biggest business, which the company attributed to a drop in sales from its commercial satellite programs, strike-delayed launches and the August sale of its Rocketdyne business.

Net income for the first three months of the year was $692 million, or 88 cents per share, up from $535 million, or 66 cents per share, a year earlier. The results included a gain of 3 cents per share due to tax settlements.

Results easily topped the consensus estimate of analysts surveyed by Thomson Financial, who had pegged earnings at 76 cents per share.

Revenue climbed to $14.3 billion from $12.7 billion, up 12 percent although below the $14.5 billion expected by analysts.

The commercial airplane business cooled only slightly in the quarter from last year's record pace, booking 176 orders — 54 of them for its still-in-development 787 — on the heels of the 1,022 in 2005. The unit now has a backlog of $132 billion, more than double that of a year ago.

The defense unit's operating earnings declined 4 percent and revenues were down 6 percent, leaving it just ahead of the commercial airplane division at $7.2 billion to $7.1 billion. The company said defense operating margins increased by 11 percent, however, driven by gains in military aircraft programs such as the C-17, F/A-18 and Rotorcraft.

"Strong overall performance, combined with a significant increase in commercial airplane deliveries, drove this quarter's results," said Jim McNerney, Boeing's chairman, president and chief executive officer.

Boeing reaffirmed its financial guidance for 2006 and 2007, saying it anticipates solid growth reflecting continuing strong performance from its core businesses, increased deliveries and companywide productivity gains. It expects earnings of between $3.25 per share and $3.45 per share this year and $4.10 to $4.30 in 2007. Analysts had been slightly more optimistic, estimating $3.45 per share in 2006 and $4.35 in 2007.

"I'm a little surprised they didn't raise guidance after this kind of a quarter, but I think that's probably just conservatism right now," said Chris Lozier, an aerospace analyst for Chicago-based Morningstar.

The company reiterated its expectation to deliver 395 planes in 2006, up 36 percent from last year, and forecast 440 to 445 deliveries in 2007. It said it expects revenues to be $60 billion this year and within a range of $63.5 billion to $64.5 billion next year, slightly short of analysts' estimates of $60.7 billion in 2006 and $64.7 billion in 2007.

Boeing's stock has doubled in the last two years and reached the latest in a series of new all-time highs on Monday at $87.25.

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