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Boeing set to deliver more planes in 2016

787 plane Image copyright Getty Images

Shares in Boeing rose 4% after the plane maker said it would deliver more aircraft than expected this year and raised its profit outlook.

The company said it would deliver between 745 and 750 commercial planes, up from an earlier estimate of 740 to 745 - but below last year's 762.

Boeing said demand for aircraft remained strong and that efforts to boost profitability were on track.

Net profit for the three months to September rose by a third to $2.3bn.

However, revenues slipped 7.5% to $23.9bn.

Profit and revenue also fell in Boeing's defence business, partly due to the discontinued C-17 transport plane.

Shares rose $5.17 to $144.19 in afternoon trading in New York. JP Morgan analyst Seth Seifman said he did not expect the stock was "set up to run away".

The deferred production cost balance for the 787 Dreamliner - a measure of manufacturing costs that are yet to be recouped by sales - fell about $150m in the quarter to $27.5bn, reflecting the fact that the jet is now profitable by some accounting measures.

The balance peaked at $28.7bn in the first quarter and has since declined.

A note from analysts at Jefferies praised Boeing for keeping 787 costs under control and said its outlook "seems bright".

Chief financial officer Greg Smith said Boeing expected revenues to be flat to "slightly down" next year following a transition to a new variant of the 777 twin-aisle plane.

Boeing plans to cut production of the 777 to seven a month next year from 8.3 - and many experts expect a further cut to five a month due to slow sales and the arrival of the new 777X.

Chief executive Dennis Muilenburg said Boeing would take more time to decide whether such a cut was needed.

Image copyright AP
Image caption An Airbus A330 operated by Hainan Airlines lands in Sydney

Meanwhile, its European rival Airbus has maintained its full-year outlook despite reporting a 21% drop in third quarter profits before interest, tax and other charges to €731m (£652m).

The company aimed to deliver "more than 670 planes" this year, but the tally to September was only 462.

Finance director Harald Wilhelm admitted there remained much still to do to hit the target, but that Airbus was counting on suppliers to help them do so.

'Healthy' demand

Chief executive Tom Enders said the number of deliveries to September "reflects the heavily back-loaded aircraft delivery schedule, ongoing production ramp-up and transition to new versions of our A320 and A330 aircraft".

He said Airbus had a backlog of more than 6,700 aircraft, reflecting "rather healthy" demand for commercial planes.

The figures comes as the aerospace group embarks on a massive restructuring programme in a bid to cut costs.

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