Boeing profit up, cuts 2008 revenue forecast

Boeing Co said on Wednesday that third-quarter profit rose more than expected, helped by higher deliveries of commercial aircraft, but it scaled back its revenue forecast for next year due to delays o

New York (Reuters) - Boeing Co said on Wednesday that third-quarter profit rose more than expected, helped by higher deliveries of commercial aircraft, but it scaled back its revenue forecast for next year due to delays on its 787 Dreamliner and slowing growth at its defense unit.

The world's biggest-selling jet maker, which is also the No. 2 U.S. defense contractor, earlier this month said its hot-selling 787 would be at least six months late as it wrestles with uncompleted work from suppliers, integrating the plane's software and an acute shortage of bolts.

The Chicago-based company, which vies with Europe's Airbus for control of the jetliner market, said it was still addressing "challenges" as it builds the first batch of 787s.

It is aiming for the first test flight around the end of March next year and expects the first delivery in late November or December 2008.

"I would characterize it as an aggressive plan with normal margins in it," said Boeing Chief Executive Jim McNerney, on a conference call, seeking to allay fears that Boeing's new 787 schedule will encounter more delays.

"The likelihood of a surprise is not high," McNerney said, as the new leader of the 787 program, Pat Shanahan, gets to grips with the schedule. Boeing veteran Shanahan was called in to replace Mike Bair last week, shortly after serious delays on the 787 were announced.

PROFIT BEATS

Boeing reported quarterly net profit of $1.1 billion, or $1.44 per share, compared with $694 million, or 89 cents per share, a year earlier.

Earnings from continuing operations were $1.43 per share, which easily beat Wall Street's average forecast of $1.24, according to Reuters Estimates.

Revenue rose 12 percent to $16.5 billion, above analysts' average forecast of $16.05 billion.

Boeing delivered 109 commercial planes in the quarter, up 9 percent from the year-ago quarter, which helped boost sales at its commercial aircraft unit by 23 percent to $8.3 billion.

The strong performance is set to continue, according to McNerney, who said firm orders this year - now standing at 919 planes - could surpass last year's record of 1,044, which saw Boeing overtake Airbus as the leading seller for the first time since 2000.

Defense revenue increased a more modest 3 percent to $8 billion, helped by strong sales at its network and space systems unit.

Boeing raised its profit forecast for the full year to a range of $5.05 and $5.15 per share, up from a previous forecast of $4.80 to $4.95. That is in line with Wall Street's average estimate of $5.06 per share.

It kept its 2008 profit forecast of $5.55 to $5.75 per share, below Wall Street's average estimate of $6.04 and lowered its revenue forecast to account for the six-month delay in 787 Dreamliner production and slower growth in its defense unit.

Boeing said it now expects 2008 revenue of $67.5 billion to $68.5 billion, down from its previous estimate of $71 billion to $72 billion. Analysts are expecting $71.2 billion on average.

It now expects to deliver 480 to 490 commercial planes next year, down from its previous estimate of 515 to 520, as delayed 787 deliveries are pushed into 2009.