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Boeing beats expectations for Q1 earnings

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By Michelle Dunlop
Herald Writer
The Boeing Co. reported $586 million in first quarter profit Wednesday, topping analysts' estimates.
"We delivered strong operating performance, made significant progress on 787 and 747-8 flight testing, and scored a major win on the U.S. Air Force Tanker program," said Jim McNerney, Boeing's chief executive officer.
The aerospace giant said its earnings per share rose 11 percent in the first quarter to 78 cents per share from 70 cents per share in the first quarter last year. Analysts had expected Boeing to meet last year's performance at 70 cents per share.
The company said its profit and earnings expectations for 2011 are unchanged. Boeing estimates full-year earnings per share at $3.80 to $4.
Boeing reaffirmed its plans to deliver the first 787 in the third quarter. The jet is more than three years late. Boeing also said it is on track to hand over the first 747-8 freighter by mid-year.
James Bell, chief financial officer for Boeing, said the company still plans to deliver a total of 25 to 40 787s and 747-8s this year. He estimates the total will be split between the two programs.
Boeing has dozens of 787s parked around Paine Field in Everett. The 787s have been built but need rework before delivery. Much of that work is being done in a facility at Paine Field that the company leased from Aviation Technical Services, a maintenance, repair and overhaul company. McNerney described the rework operation as a "second production area" which will be needed through next year.
The 787s slated for delivery this year will be a combination of newly built 787s and ones that have been reworked, McNerney said.
"We are confident, very confident" in the company's estimate for 787 and 747-8 deliveries this year, McNerney said.
Due to delays and significant rework on early 787s, analysts have questioned when Boeing will be profitable on the Dreamliner program. McNerney declined to comment on the program's profitability, saying Boeing will give more details on that when the first 787 is delivered this year.
Boeing is looking at "a new model or two on it beyond what we have now" on the 787, McNerney said, though he didn't give details about the new versions. The company will first introduce the 787-8, which will be followed by the 787-9. Boeing previously halted work on a short-haul 787-3.
As for Boeing's established lines in Everett, McNerney hinted the company is eyeing another production increase on its 777. The company is moving up to a rate of 8.3 aircraft monthly on the 777, but Boeing is "looking hard" at going higher, McNerney said.
Boeing has been considering the future of its Renton-built 737. The company continues to lean towards an all-new replacement for the single-aisle jet, McNerney said. But Boeing won't make a decision on that jet until later this year.
The company's shares hit a 52-week high of $77.31 this morning after the company's earnings were announced.
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