Transcripts

Boeing's Profit Picture Takes Off For 2006

PAUL KANGAS: Other earning news today was decidedly better, with positive results from two marquee names helping boost the market. Boeing and Time Warner both turned in better than expected financial results. Scott Gurvey runs down the numbers.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Time Warner was king for the day on Wall Street, the world`s biggest entertainment company posting an increase in profits in the fourth quarter. First Call reports that Time Warner earned $0.25 a share, compared to $0.24 a share in the fourth quarter of 2004. The First Call survey of analysts had forecast earnings at $0.22. Time Warner posted revenue gains in all but one of its operating units. "Harry Potter" drove profits in movies; higher ad revenue and job cuts added to profits in magazines. Time Warner cable was the fastest growing segment. But AOL, the Internet portal, lost 625,000 American subscribers and was the only part of the company to report a drop in sales, although profits still rose.

SUSAN KALLA, MEDIA ANALYST, CARIS & CO.: The big swing factor in the stock is, of course, the performance of AOL. So, to the degree that they can stop the decline in subscribers and shore up the subscription business and grow-- more importantly, grow the advertising business -- then they`ll be able to turn that business around.

GURVEY: Dow component Boeing posted a soaring increase in profit for the fourth quarter. The company credited strong demand from growing airlines in Asia and the Middle East. Boeing`s fourth quarter earnings of $0.58 a share were more than double earnings for the year-ago period. First Call`s survey had forecast earnings of $0.44. Boeing gave upbeat guidance for 2006, saying sales of both commercial jets and weapons systems are expected to remain strong. David Strauss, his team or family own shares in Boeing and UBS does business with it.

DAVID STRAUSS, AEROSPACE ANALYST, UBS: As long as they can keep the momentum going on the commercial aerospace side with orders and Mr. McNerny (ph), the new CEO, can live up to his promises that he`s made on the cost cutting side, we think it looks pretty good. We like the commercial aerospace suppliers better, in terms of upside to current stock prices, but we think Boeing is likely to trade up as well.

GURVEY: Amazon.com and International Paper are two of the companies expected to report earnings tomorrow. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.