Boeing Earnings are Flying Right

The Boeing Company (NYSE: BA) reported net income of $1 billion with EPS of $1.27 beating the Street estimate of $1.12 handily by $0.15, up from $1.25 a year ago. Revenues of $20 billion were above the $19.37 billion estimate, up from $16.54 billion a year ago. Boeing was trading up in pre market on this news.

Boeing raised its EPS guidance range to between $4.40 and $4.60 for 2012. The company also increased revenue guidance to between $79.5 and $81.5 billion on better defense, space and security revenues and reaffirmed its 2012 operating cash flow outlook.

"Increased revenues and strong operating performance across both our major businesses drove significantly improved first-half 2012 results for Boeing," said Chairman, President and CEO Jim McNerney.

Commercial airplane deliveries increased 27 percent in Q2 and commercial revenues increased by 34 percent. Final assembly of the first 787 was completed and the first 747-8 model was delivered. Commercial airplanes booked 28 new orders. Backlog remains strong with approximately 4,000 airplanes valued at $302 billion.

Boeing's Defense, Space & Security division revenue increased to $8.2 billion. Military Aircraft division revenue increased to $4.1 billion due to an increase in plane delivery. This quarter Boeing won the new initial Apache helicopter contract from the US Army.

The Network & Space Systems Q2 revenue was down at $1.9 billion, although was awarded its first international cyber security contract. Global Services & Support revenues increased to $2.2 billion, due to higher volume in integrated logistics. This segment won the F-15 Singapore logistics contract. Backlog is $72 billion.

Boeing said that pension costs went up but were offset by strong cash flow.

Analysts have concerns with the prospect of the automatic military spending cuts coming in January 2013. Boeing has been adjusting its defense business smaller and diversifying in preparation.

Boeing has been trading in a general uptrend since August 2011. Shares dipped to just below the 200 day moving average at the end of May, and now is just above the 50 and 200 day averages.