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Last Updated: Wednesday, 28 July, 2004, 16:02 GMT 17:02 UK
Defence deals drive Boeing profit
Boeing's 7E7 jet
Boeing says business is picking up for its 7E7 jet
Surging military sales have seen Boeing rebound to a $607m profit, from a loss at the same time last year.

The US giant's defence business drove its gains which saw its revenues rise 3% to $13.1bn between April and June - with military deals making $7.2bn.

Boeing's commercial business suffered after the 11 September attacks, but the firm said it was finally making headway - albeit more slowly than rival Airbus.

It now expects to deliver more jets than forecast in 2005.

"Boeing delivered strong results in the second quarter as we continued to execute well in our core businesses and invest for growth," said chief executive Harry Stonecipher.

Losses slashed

The news was a turnaround for the company, which posted a loss of $192m during the same period last year after suffering a $1bn loss in its satellite-making unit.

The loss was slashed to $50m during the three months to June this year.

Analysts welcomed the news, hailing the defence driven turnaround at the aerospace firm.

"I think it's an all go for them," Zack Turner, analyst at Stanford Financial Group, told Reuters.

"Despite the scandals of last year that kind of tainted them, I think that's going to be rebuilt."

Last year the number two Pentagon supplier admitted spying on rival Lockheed Martin, which led to it being stripped of $1bn in Pentagon contracts, and late in 2003 it fired its finance boss for unethical conduct.

Boeing has also suffered in recent years as a result of the downturn in the commercial airline sector amid terrorist worries following the September 11 attacks, Sars virus outbreak and the Iraq war.

But the sector now seems to be picking up, and the world's number two jet maker said profits at its Seattle-based commercial unit had jumped 22%, even though revenues slipped 3% to $5.67bn.

On the up

Boeing blamed the higher proportion of cheaper 7E7 planes for the revenue slide, but said that lower costs at the division had offset the fall.

Customers are showing interest in the fuel-efficient plane, which was launched in April: four airlines have ordered a total of 62 aircraft, with proposals received for a further 200.

Boeing added that jetliner deliveries had also picked up, prompting it to revise its deliveries forecast up from an estimated 300 in 2005 to between 315 and 320 - although the total remains below the output of 521 reached in 2001.

The improvement led the firm to announce two weeks ago that it would be taking on 3,000 workers - its first hiring drive since it axed 42,000 jobs following the September 11 attacks.

Shares in the firm stood 80 cents higher at $49.03 on Wall Street at around 1530 GMT.

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