The Boeing Company (BAFree Boeing Stock Report), the world's largest aerospace/defense corporation, achieved record bottom-line results in the second quarter. Although revenues advanced just 1% year over year, to $22.0 billion, the operating margin expanded 20 basis points. In addition, management repurchased 11.4 million shares during the quarter, at a cost of $1.5 billion. Wider margins and a lower share count helped Boeing post earnings of $2.24 per share, which was far higher than most analyst estimates (including our own $1.73 call), and 59% better than the year-earlier tally. Furthermore, the $2.24 represents Boeing's most profitable quarter in its history.

During the June interim, Boeing's Commercial Aircraft division continued to benefit from increased demand for its offerings. More specifically, it delivered 181 planes during the quarter, up from 169 last year. Revenues and earnings from this business increased 5% and 7%, respectively. Elevated deliveries and orders for 787s, 777s, and 737s were the main contributors to the healthy results. The company also booked 264 net orders during the second period, and its backlog remains huge, with over 5,200 airplanes valued at $377 billion.

The Defense, Space, and Security division continued to not fare as well. Due to lower equipment deliveries and orders from the U.S. Government, this segment's top line declined 5%, to $7.7 billion. The operating margin narrowed 200 basis points, to 7.5%. Overall, it was a terrific quarter for Boeing, and the stock was up modestly in pre-market trading following the earnings release.

Looking ahead, due mostly to the June-period results, we are increasing our 2014 share-net estimate by $0.60, to $7.15, which is above management's guidance ($6.85 to $7.05). Clearly, we believe that its expectations are a tad conservative. On that note, we continue to like Boeing's near- and long-term prospects. We believe that the U.S. economy will continue to expand in 2014 and 2015, which should lead to healthy growth in air travel. As a result, a number of domestic and foreign airlines ought to possess the financial flexibility and eagerness to replace their aging fleets with new aircraft. In anticipation, Boeing has already increased production schedules for some of its most popular models. All told, the company's huge backlog, along with a steady flow of new orders, should support full production for many years. Lastly, despite the recent tragedies of Malaysia Airlines' Flights 17 and 370, we do not expect these events to hurt Boeing's operations in any material way.

For 2014, as mentioned, we now expect share net of $7.15, which would represent a 20% increase over 2013's tally. We have also bolstered our 2015 bottom-line call by $0.30, to $7.60 per share. Looking further out, we project that share earnings will reach $10.25 by the 2017-2019 time frame.

As for the equity, we think that Boeing stock would serve investors well as a core, long-term holding in most portfolios. After a terrific run, the stock is now trading about 10% below its 52-week high. Boeing also carries our top rank for Safety, and the company's Financial Strength grade is A++ (Highest).

About The Company:The Boeing Company is a leading manufacturer of commercial jet aircraft. It also produces fighters (F-15, F/A-18), C-17 cargo carrier, V-22 helicopter, E-3 AWACS, E-4 command post, E-6 submarine communicator, ground transportation systems, develops the space station, and does work on the F-22 (ATF). In 2013, foreign sales accounted for 57% of overall revenues, and R&D amounted to 3.6% of sales. 

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.