US Plane maker Boeing has reported a surprising 12 percent jump in quarterly profit, and raised its full-year forecast on soaring commercial aircraft production, sending its shares up to an all-time high.
Gray skies are clearing up for America's largest plane maker.
Boeing's earnings easily flew past forecasts, sales increased by double-digits, order backlog is at a record, and the company boosted its profit outlook for the year.
This, after months filled with bad publicity of safety problems with the 787 Dreamliner, which may have cost Boeing its traditional stronghold on the Japanese market, opening a door for bitter rival Airbus.
Boeing is riding the wave of demand for more fuel efficient planes, says Morningstar equity analyst Neal Dihora.
"They have 4,700 aircraft in back log. It is going to take them more than five years to burn it off even if they didn't win another order. And so I think they have enough growth to sustain them but the CEO has the company focused on operating costs, so we are seeing the benefits of that." Dihora said.
And Dihora points out - despite unusually high media attention of the 787 - the plane is doing well for Boeing financially.
"They commented that profitability is going to be in the low single digits, which is a really big surprise. I think that when you say that the first - for so many years we were told that it was a zero profit enterprise but now it's going to be low single digits and actually moving up because they are getting their production facilities improved down in South Carolina and other locations." Dihora said.
After costly production delays and mistakes, Boeing is aiming to produce 10 Dreamliners per month by the end of this year, 12 by the end of 2016, and 14 by the end of the decade.
But that comes at a price. The more low-profit Dreamliners that roll out, the more margins will be negatively impacted - throw in higher research and development costs for its other new plane the 737 MAX, and possible price cuts to stay competitive with Airbus and some analysts question Boeing's profitability.
Investors, however, have buckled in for a long trip, riding the stock to a record high, with a year-to-date gain of 70 percent.
Boeing's other business - defense was weak but not enough to offset the pick-up in business on the commercial side.
