Chicago: Boeing Co. rose after reporting earnings bolstered by surging deliveries of the 737, the planemaker’s largest source of profit, and an unexpectedly large one-time gain from US tax cuts.

The company pocketed a boost of $1.74 a share in the fourth quarter from the lower corporate levy and expects more benefits to come this year. The tax reduction is taking effect just as the company starts to see large, taxable cash gains from its 787 Dreamliner after a decade of losses.

Lower taxes are combining with record jetliner deliveries to fuel the cash gush at Boeing, the biggest gainer on the Dow Jones Industrial Average last year and so far in 2018. Free cash flow was $2.47 billion in the fourth quarter, Boeing said in an earnings report Wednesday, exceeding the $1.66 billion expected by analysts.

“The buyback and cash flow have been the whole story on the stock for the last year," Ken Herbert, an analyst at Canaccord Genuity, said in an interview prior to earnings.

Shares climbed 4.1% to $351.50 before the start of regular trading in New York. Boeing had advanced 15% this year through Tuesday, the largest gain among the 30 members of the Dow Jones Industrial Average. The stock has more than doubled since the start of 2017 as Boeing surpassed General Electric Co. to become the largest US industrial company by market value.

Profit beats

Adjusted fourth-quarter earnings were $4.80 a share, the Chicago-based company said, or $3.06 a share excluding the tax gain. Analysts had predicted $2.90 a share, according to the average of estimates compiled by Bloomberg. Revenue rose 8.9% to $25.4 billion, compared with the $24.7 billion analysts expected.

As GE has stumbled, Boeing’s steady performance and willingness to hand shareholders cash by the bucketful attracted investors, Herbert said. The aerospace manufacturer has pledged to return the equivalent of its free cash flow to investors through an $18 billion share buyback program and 20% dividend increase approved by directors in December.

Revenue has declined since 2015. Boeing slowed deliveries of its highly profitable 777 jetliners as sales waned amid a shift to a new model. But earnings per share have continued to rise, boosted in part as buybacks contributed to a 15% drop in the company’s average share count.

Under chief executive officer Dennis Muilenburg, Boeing has rolled out new planes like the 737 Max and 787-10 with few glitches while rival Airbus SE battled engine delays for its A320neo and A330neo. Muilenburg’s campaign to make Boeing leaner has lowered the cost of goods and services.

The planemaker is forecasting sales growth in 2018 as Boeing lifts 737 output by 11% and pockets additional tax savings. Revenue will range from $96 billion to $98 billion, the company predicted, compared with the $93.6 billion expected by analysts. Bloomberg