Company Riding The 787 Wave

Boeing told investors this week it remains on track for double-digit increases in revenue and earnings and says it anticipates strong growth in 2007 and 2008 thanks to its new 787 jet.

The company made the announcement at its annual investor conference in Chicago, at a time when Boeing is fast closing in on Airbus for the title of world's leading commercial airplane maker, according to the Associated Press.

Jim McNerney, Boeing Chief Executive Officer, blew off the notion that demand for commercial jets was in decline pointing to the 787's phenomenal sales record. There are currently 568 orders for Dreamliners; the first preproduction model is due to roll off the assembly line July 8.

"The US and European legacy carriers have yet to order in any substantial quantities," he said in a response to an analyst's question at the meeting. "So we don't see an immediate end to the cycle."

McNerney also thinks it's "inevitable" a third commercial airplane maker, perhaps from China, will emerge to challenge any first place ranking in the commercial jet manufacturing industry.

But, he noted, "it's a 15-to-20-year run before we see a new entry," since it takes time to build such a complex business.

"No matter how you look at it, Boeing is off to a strong start in 2007," said Chief Financial Officer James Bell.

In April, Boeing reported 27 percent higher first-quarter earnings that beat Wall Street projections. McNerney said it is on pace to overtake Airbus in airplane deliveries by early next year, helped by the momentum generated by the 787.

Forecasts for earnings were between $4.55 and $4.75 per share in 2007 on revenue between $64.5 billion and $65 billion. In 2008, profits are expected to grow to $5.55-$5.75 per share on revenue of $71 billion to $72 billion.

The new plane is scheduled to make its commercial appearance next May. It's the first commercial jet that will be made mostly of light, sturdy carbon-fiber composites instead of aluminum and is said to be 20 percent more fuel-efficient than comparable jets.

Mike Bair, head of the 787 program, said there is a one-month window for test flights starting at the end of August but the company didn't really want to commit to a specific date just yet.

"The airplane will fly when it's ready to fly," he said.

FMI: www.boeing.com