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.
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.