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Boeing 4Q profit surges on aircraft deliveries

By Michelle Dunlop
Herald Writer

The Boeing Co. said its fourth-quarter net income jumped 20 percent as a brisk commercial aircraft business offset a flat quarter for defense.

Boeing reported a net income of almost $1.4 billion Wednesday, or $1.84 per share. That's above Wall Street expectations of $1 per share. Revenue was $19.56 billion, also better than expected.

"2011 was a pivotal year for our company," said Jim McNerney, Boeing's chief executive officer, in a conference call with analysts and journalists.

Boeing delivered 128 commercial planes during the quarter, up from 116 a year ago. Profits from commercial planes jumped 56 percent.

For the first time in a decade, Boeing could take back the title from Airbus of the world's biggest jet maker in 2012. The company estimates it will deliver between 585 and 600 commercial jets in 2012. Of those, 70 to 85 will be Boeing's new 787 and 747-8s, split equally.

"We're confident in the number of 747s and (7)87s we've predicted to deliver," McNerney said.

Boeing delivered its first 787, after a delay of more than three years, last September. McNerney reiterated on Wednesday Boeing's plan to reach a production pace of 10 787s monthly by the end of 2013.

The company has reached a pace of 2.5 787s monthly and is moving to 3.5 787s monthly in the next quarter, McNerney said. The amount of rework required on 787s being produced has been reduced significantly from the initially produced Dreamliners, he said.

By mid-year, Boeing expects to produce its first 787 off the line that doesn't require additional changes.

Boeing is looking at ways to improve 787 profitability, said Greg Smith, Boeing's chief financial officer elect. Smith replaces Boeing CFO James Bell, who is retiring at the end of the quarter.

After Boeing reaches its goal pace on the 787 and production stabilizes, “we will consider rates above 10 per month,” Smith said.

The company is predicting a 2012 profit of $4.05 to $4.25 per share. It expects revenue of $78 billion to $80 billion.

"We enter 2012 with renewed momentum, and proven business and product strategies," McNerney said. "With a record backlog and intense focus on productivity, we are well positioned to deliver growth and increased competitiveness."

But Boeing does face challenges in rising pension costs and a weak defense market. The company said its defense revenue will fall in 2012.

The Associated Press contributed to this report.