Updated from 7:49 a.m. EST

Boeing ( BA) blew away Wall Street's estimates for the fourth quarter, and the jetmaker was decidedly upbeat on this year and 2008.

Quarterly revenue surged 26% year over year to $17.5 billion, exceeding estimates by $1 billion. Fourth-quarter net income was $989 million, equal to $1.29 a share, or $1.16 excluding items. Analysts expected an adjusted profit of only 98 cents.

Boeing shares surged Wednesday, gaining $3.78, or 4.4%, to $89.78.

For 2007, Boeing said it should earn $4.55 to $4.75 a share, ahead of its prior forecast of $4.45 to $4.65. Analysts are at the high end, expecting $4.75 on average. About 20% of those earnings should come in the first quarter, when aircraft delivery totals will be similar to the fourth quarter, said CFO James Bell during a conference call.

This year's revenue should be $64.5 billion to $65 billion. Again, analysts are being optimistic, projecting nearly $66 billion.

Next year, Boeing expects to earn $5.55 to $5.75, a bit below estimates of $5.79, on revenue of $71 billion to $72 billion. "We are truly raising the bar here at Boeing," said CEO Jim McNerney, during the call.

McNerney assured analysts that the 787 Dreamliner will be delivered as scheduled in May 2008. He said Boeing had activated four of the eight contingency plans it had prepared to assure on-time production, but the cost has been minimal. The plans involve making various parts in Washington if the need arises.

Boeing is having "hypothetical discussions" about adding a second 787 production line, McNerney said. "The good news is we don't have to make that decision right now, although it's a question we have to increasingly ask," he said.

The company anticipates orders from the major U.S. airlines in 2007 and 2008. The carriers are benefiting from favorable passenger growth, high ticket prices, and oil prices that are "high enough so that the efficiency of the newer airplane makes a real difference, but not so high that the carriers can't make money," McNerney said.

Boeing delivered 398 aircraft in 2006. Its schedule includes 440 to 445 deliveries in 2007, 515 to 520 in 2008 and more in 2009. Year-end backlog reached a record $250 billion, up 22%. Three dozen customers have placed orders for 452 Dreamliners.

The company's integrated-defense systems unit reported a year-end backlog of $75.7 billion. During the quarter, it took a $274 million charge for its long-delayed Airborne Early Warning & Control program, an airborne surveillance system.

"It is the first new system for advanced warning and control that has been put in to the market in a number of years," Bell said. "It's probably the most challenging fixed-price development program we have today in the company."

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