updated 7/25/2007 12:59:20 PM ET 2007-07-25T16:59:20

Boeing Co. posted its largest profit in nearly four years Wednesday, earning $1.1 billion in the second quarter as it continued to build momentum against European rival Airbus.

The better-than-expected results, the company’s strongest since the fourth quarter of 2003, easily topped Wall Street forecasts and sent Boeing’s stock up three nearly percent in early trading.

For the April-through-June quarter, the Chicago-based airplane maker said its profit amounted to $1.35 per share. That’s compared with losses of $160 million, or 21 cents a share, the year before when the company was bogged down by the legal costs of a government investigation.

Second-quarter revenue climbed 14 percent to $17 billion, from $15 billion, easily beating Wall Street expectations.

On average, analysts surveyed by Thomson Financial forecast earnings per share of $1.16 and $16.2 billion in revenue for the Chicago-based company during the period.

Boeing shares jumped $3.56, more than 3 percent, to $107.36 at the open of trading Wednesday.

The world’s No. 2 maker of commercial planes behind Airbus is on pace to overtake its European competitor in deliveries by early next year on momentum from the 787 Dreamliner, which has 683 firm orders from nearly four dozen customers to date.

Boeing said it was working to address issues related delivery of the massive aircraft, but expect the plane will arrive on time in May 2008.

The aviation company said it was boosting its forecast for 2007 research and development expenses to $3.7 billion — up from a range of $3.2 billion to $3.4 billion — as it works to keep the 787 on schedule.

Even with added expenses, Boeing said it would raise its 2007 guidance, based on its growth and strong airplane business.

The company said it expects to earn between $4.80 and $4.95 per share on revenue of $65 billion.

“Although the increase to R&D will not go unnoticed today, we think that the solid operational performance, raise to guidance and continuing strength in commercial demand should be generally well received by investors,” Banc of America Securities analyst Robert Stallard wrote in a research note.

Boeing’s commercial aircraft division saw its second-quarter deliveries grow 18 percent to 114, up from 97. The division’s revenue grew 22 percent to $8.7 billion while earning $960 million.

Boeing’s integrated defense system earned $854 million and the company’s backlog reached a record $279 billion.

It reaffirmed its 2008 guidance of $5.55 to $5.75 per share on revenue of $71 billion to $72 billion.

“Our results and increased outlook reflect strong markets, preferred products and services, and a focus on execution, growth and productivity,” Chairman and CEO Jim McNerney said in a statement.

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