Boeing Flying High on Its Commercial Airplanes

Big plans, big promises, and big results. That's what Boeing (NYSE: BA  ) has been about lately. The aircraft maker recently came out with its first-quarter results, posting outstanding numbers that exceeded Street expectations.

Already considered a success story, I think the company has the potential to surprise investors with its solid growth prospects.

A quick look at the numbers that jumped
During the quarter, Boeing's revenue increased to $19.38 billion, an impressive 30% increase as compared to last year, benefiting by increased deliveries. And that's not all. The company's net income rose by a staggering 58% to $923 million. This translates into earnings of $1.22 per share, well above analyst estimates of $0.93 per share.

Rocking commercial segment
What stole the show was the company's commercial aircraft business, which accounts for more than half of Boeing's total revenue. Boeing's top line jumped as commercial aircraft sales spiked up by 54% -- a commendable show similar to the last quarter.

With the increase in demand for air travelers and the need to be fuel-efficient, several airlines across the world are rebuilding their fleets. Being one of the world's two biggest aircraft makers, Boeing stands to gain from this demand. The company's restricted production capacity was a hindrance in the past as it could not take advantage of its massive backlog. However, in the first quarter, Boeing reported a 32% jump in its production capacity. As the company gets paid on delivery, this production boost helped strengthen its top line.

Despite the shrinking U.S. defense budget, Boeing has managed to not only stay afloat but remain upbeat at the same time, thanks to its commercial airplane segment. This is a trend seen among other defense contractors. General Dynamics (NYSE: GD  ) in its first quarter lost 3% of its sales overall but its aerospace segment witnessed a healthy 20% increase in revenue.

Defensive move
Moving on to Boeing's defense division, numbers were not as robust as in its commercial segment, but they weren't that bad. The company generated $8.2 billion from its defense-related business, an 8% increase compared to last year, helped by improved sales of military aircraft. This number looks even better when compared to defense contractor Lockheed Martin's (NYSE: LMT  ) 6% revenue growth in the first quarter.

The Foolish takeaway
Boeing's commercial aircraft business was robust, while revenue from its defense division grew more than that of some pure-play defense companies. Add the fact that it has alternate sources of revenue (commercial and defense-related) to depend upon, and Boeing looks like a solid bet for the future.

The company also has a strong backlog worth $380 billion, nearly 7% more than what it had at the beginning of the year. And it's revving up its production by as much as 60% through 2014 in a bid to level up the order backlog. If that happens as planned, this stock is sure to be a highflier in the long run.

In love with Boeing already? Make sure you add it to your Watchlist to stay updated on this stock. Click here for all its Foolish analysis for free!

Navjot Kaur does not own shares of any of the companies mentioned in this article. The Motley Fool owns shares of General Dynamics and Lockheed Martin. The Motley Fool has a disclosure policy.

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