The Boeing Company (BA) is flying high once again. The world's second-largest commercial jet and military weapons manufacturer, Boeing had floundered in the wake of scandal and ever-increasing pressure from rival Airbus S.A.S throughout much of the new millennium. Beginning in 2005, however, the turbulence cleared and Boeing's prospects have soared.

During the first quarter of 2006, airplane deliveries were up 40%, producing $7.1 billion in revenue. In addition, persistent strong demand for the 787 Dreamliner - scheduled for service in 2008 - has helped pilot Boeing's contractual backlog to a record $213 billion, providing job security and stability for years to come. Not surprisingly, investors have taken notice-- driving BA stock to its highest levels since pre-9/11.

Will the ascent continue? Boeing's management seems to think so. Boeing Co. is delivering 395 airplanes this year and will deliver 10 more next year, the aerospace company's chief executive said Wednesday, affirming Boeing's earlier forecasts.

The Boeing Company is divided into four divisions:

Boeing Commercial Airplanes [BCA] [49% of revenues in the first quarter of 2006]. Boeing and Airbus are the only makers of 100-plus seat commercial airliners in the world. According to analysts, Airbus holds a slight edge in market share, but Boeing is rapidly closing the gap [especially since the sales debut of the Dreamliner]. Based on data provided by Avitas, Inc., an independent research firm, and the International Air Transport Association [IATA], the world airline fleet grew by an average of 2.4% per year from 1992 to 2003.

Integrated Defense Systems [IDS] [50% of revenues in the first quarter of 2006]. IDS is divided into three newly-reorganized segments: Precision Engagement and Mobility Systems (primarily producing military hardware such as the F/A-18 Super Hornet and the AH-64 Apache helicopter); Network and Space Systems [devoted to enhancing U.S. defense and intelligence through programs such as FCS, GMD, and the Delta rocket and BSS Satellite systems] and Support Systems [offering a wide variety of weaponry assistance]. IDS revenues have increased by over 25% since 2002, and are primarily driven by growth in the Procurement and Research & Development portions of the U.S. defense budget. From fiscal year [FY] 1993 to FY 2004, those sectors grew by approximately 1.5% and 1.8% per year respectively.

Boeing Capital Corporation [BCC] ]1% of revenues in the first quarter of 2006]. BCC chiefly generates revenue via interest payments derived from financing receivables and notes, lease income, investment income, etc. BCC currently leases aircraft to Hawaiian Airlines and is expected to maintain that arrangement when Hawaiian emerges from Chapter 11 bankruptcy protection.

Boeing's "Other" segment, primarily consisting of Connexion by BoeingSM, has yet to turn a profit. Connexion by BoeingSM provides high-speed Internet access to passengers and will soon be expanded to include wireless phone service.

With this business model in mind, it is easy to understand how The Boeing Company has managed to take flight despite rising fuel costs and uncertain economic times for commercial airlines. As noted above, BCA represents just 49% of the company's revenues. Thus, concerns of a "disconnect between airline profits and aircraft orders" that first surfaced in a June 2005 report by Goldman Sachs have been largely offset by the perpetual demand for defense and military hardware-- which is beneficial to IDS! True, those on blood pressure medication may wish to avoid BA stock. During the past 10 years, it has seen more highs and lows than Kirstie Alley's bathroom scale. From January 2, 1996 to January 3, 2000, equity value in BA rose just 7.8% [adjusted for dividends and splits]-- despite yearly gains of better than 25% in both 1996 and 1999! Furthermore, BA stock is already trading at a premium to its traditional P/E ratio and currently exceeds the industry norm as well.

Nonetheless, the company has adapted splendidly to the present political and economic uncertainty and appears well-poised to do so in the future.