The Boeing Company's (BA - Free Boeing Stock Report) streak of reporting better-than-expected quarterly financial results has come to an end. More specifically, for the first quarter of 2014, the world's largest aerospace/defense corporation achieved share earnings of $1.28. This figure was $0.09 below our estimate and 11% lower than the year-earlier tally. For the most part, Boeing performed well during the quarter (discussed below), but the disappointing bottom-line performance stemmed from retirement plan charges, as well as narrower margins. Indeed, its companywide operating margin was 7.5%, a 60 basis point reduction, year over year.

During the March period, Boeing's Commercial Aircraft division continued to benefit from increased demand for its offerings. On that note, it delivered 161 planes during the quarter, up from 137 last year. Revenues and earnings from this business increased 19% and 23%, respectively. Elevated deliveries and orders for 787s and 737s were the main contributors to the healthy results. The company also booked 235 net orders during the quarter, and its backlog remains huge, with over 5,100 airplanes valued at $374 billion.

The Defense, Space, and Security division did not fare as well. Due to lower equipment deliveries and orders from the U.S. Government, this segment's top line declined 6%, to $7.6 billion. The operating margin narrowed slightly.

Overall, it was a mediocre quarter for Boeing, though management did reaffirm its full-year share-net guidance range of $6.10-$6.30. As a result of the first-quarter miss, we are lowering our 2014 bottom-line estimate by a dime, to $6.45 a share. Clearly, we still believe that management's guidance is a tad conservative. We do not appear to be alone in regard to that assessment, and Boeing stock was trading modestly higher in pre-market trading following the earnings release.

Looking ahead, we continue to like Boeing's near- and long-term prospects. We believe that the U.S. economy will continue to expand in 2014, 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 continues to increase production schedules for some of its most popular models, including the 737 and 777. Furthermore, interest and orders for the 787 have been impressive, especially now that the problems with this aircraft now appear to be in the rearview mirror. All told, the company's huge backlog should support full production for many years.

For 2014, as mentioned, we now expect share-net of $6.45, which would represent an 8% increase over 2013's tally. Our 2015 call, at this time, remains at $7.30 per share. We also project that earnings will reach $10.00 per share by the 2017-2019 time frame.

As for the equity, it now appears a bit expensive, which mostly stems from the fact that the stock has been on a terrific run of late. In fact, Boeing was the best performing member of the Dow in 2013. It is now trading at about 20 times our 2014 share-net estimate, which is meaningfully higher than recent annual levels, as well as the multiple we project to 2017-2019. In our view, current shareholders may want to use this opportunity to take some profits, and we recommend that interested investors wait on the sidelines for a better entry point.

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.