What's Fueling BE Aerospace's Growth?

BE Aerospace (Nasdaq: BEAV  ) , supplier of aircraft interiors, consistently posted high growth numbers all through 2011. Its bottom line in the first three quarters of 2011 grew by 49%, 47%, and 59%, respectively. In its latest quarter, BE Aerospace's income rose by a staggering 84% compared to last year.

What's fueling such growth? Let's dig in.

A peek at the quarter
In the fourth quarter, BE improved its revenue by 21%, increasing it to $655 million. After adjusting for one-time acquisition and debt repayment costs, net income of $57.3 million translated into earnings of $0.60 per share, which beat Street expectations.

Basking in the commercial atmosphere
Each of BE's three segments -- commercial aircraft, consumables management, and business jet -- saw a double-digit growth in sales in the last quarter. However, what stole the show was the impressive 25% revenue growth of BE's commercial aircraft business, which accounts for more than half of the company's top line.

A positive commercial aerospace environment benefited BE. Last year, global passenger traffic saw a 6% increase. Growing air travel has pumped up demand for new and renovated jets.

Also, aircraft makers Boeing and Airbus have been increasing their production capacity to meet the growing demand for commercial airplanes. This means more orders for BE. In the quarter, BE won a valuable $800 million contract from Boeing, which makes it the exclusive manufacturer of Boeing's aircraft toilets.

What next?
Looking forward, in 2012, the International Air Transport Association expects a further 4% increase in global passenger traffic and capacity -- good news for BE. Moreover, the company has a solid backlog that climbed 35% to $7.9 billion.

BE is expected to further benefit from an increase in Boeing and Airbus' production capacity. However, the company's vast client base ensures it doesn't have to rely on a few customers or being severely affected by the fiscal challenges of economies such as the U.S. and Europe.

These factors justify BE Aerospace's raised earnings forecast for 2012 to $2.75, which is just above analysts' estimates.

Navjot Kaur does not own shares of any of the companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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