Boeing (NYSE: BA), an aerospace entity whose colleagues include Northrop Grumman (NYSE: NOC) and Lockheed Martin (NYSE: LMT), had a very tough earnings report today. Reading about it is not for the shareholder who cannot stand even the smallest amount of pain. According to this Bloomberg article, Boeing missed estimates and posted a woeful loss because of delays for a couple of jet products.

Boeing lost $2.23 per share in the third quarter. The comparison is pretty tough, because in the similar quarter last year, the company earned 96 cents per share. Boeing was expected to lose somewhere around $2.12 per share, according to Earnings.com. Unfortunately, the guidance for the full fiscal year is pretty bad, too. What once was a range between $4.70 per share and $5.00 per share has now dropped to one with a low of $1.35 per share and a high of $1.55 per share.

TheStreet.com's Jim Cramer says that it's a jobs play with actual profit that doesn't need help from the government.

Does a rising tide lift all B.O.A.Ts? I am talking about the quad-bull that seems to be the leadership here: banks, oils, aerospace (new one, touched on last night on "Mad Money") and tech? Is it enough? I think so.

Aerospace is ready. The new plane cycle the majors have been waiting for is ready. The dollar's down enough to make it pretty stupid to go with Airbus vs. Boeing (NYSE: BA) (Cramer's Take) if you are going to expand your fleet. The new planes have just enough oil-saving to make it so the upgrade is almost going to have to happen.

In this market, it goes without saying that caution remains the watchword. Until the U. S. Treasury Department's program for toxic asset removal from the banking system has been clarified, there's an added layer of risk for a stock investment. And this unknown sits atop a U.S. recession that enters its 16th month in March.

Still, there are bargains to be had for risk-tolerant investors, and along that line, Honeywell International Inc. (NYSE: HON) is worth a review.

In his Validea newsletter, John Reese selects stocks using the investment strategies of the market's leading gurus, such as Benjamin Graham, John Neff, Warren Buffett, David Dreman, and Peter Lynch.

The advisor, and author of the just-published The Guru Investor, recently ran a screen based on the investment strategy of Kenneth Fisher to find his latest buy recommendation -- Kennametal (NYSE: KMT).

Reese explains, "For decades, the price-to-earnings ratio has been the most widely used valuation measure for stock investors, and a key tool in the arsenals of many of the gurus I follow. ut in 1984, Kenneth Fisher sent a shockwave through the P/E-conscious investment world.

"We've looked at several ways to play anticipated growth in wind energy; we've also considered titanium makers for that industry's ties to the production of lightweight, modern aircraft," notes Bill Martin.

In his BullMarket.com, he explains, "While the two trends might not appear to have much in common at first glance, Hexcel Corp. (NYSE: HXL) offers a way to play both the aircraft and wind markets.

"The connection is the lightweight, composite materials Hexcel makes that are used by producers in both sectors. Hexcel develops and manufactures advanced structural materials.

"It is the largest U.S. producer of carbon fiber; the world's largest weaver of reinforcement fabrics; and the number-one producer of composite materials.

"Its product was initially developed for the aerospace industry, but is now used in a wide range of applications -- from golf clubs to satellite arrays, and from the rotor blades of wind turbines to life-saving monocoques for Formula 1 race cars.

"It's been a rollercoaster ride for Hexcel's stock in the past 12 months. The shares hit their one-year peak of $27.19 in December 2007; by January 22nd they had plummeted to $17.. The shares rebounded through May, only to fade again. Year to date, HXL is off about 15%.

Diversified industrial manufacturer Eaton Corporation (NYSE: ETN) posted some great numbers for 2Q 2008. Investors responded by pushing the stock down 8% as a result. Go figure. With the exception of its automotive segment, which saw a modest 2% decline in sales, all other divisions posted double digit sales increases with demand remaining strong going forward. 2Q sales increased 32%, net income increased 35%, while net income on a per share basis increased 24% The company posted these results despite the fact that oil prices increased 40% during the quarter.

The FAA recently awarded a $40 million contract for power quality equipment. The company's Hydraulic Launch Assist technology performed very well in tests on trash trucks. It reduced fuel costs by 25% and significantly reduced brake service costs. With diesel prices showing no signs of decline, demand for this technology will be very strong when it becomes commercially available in late 2008. CEO Alexander Cutter forecasts FY sales growth to be 3% in the U.S. and 5% internationally. FY operating EPS are forecast to grow 12-16%, resulting in EPS of $7.70-$8.00. At this rate of return, the stock is currently bargain-priced around $73.00

BusinessWeek reports that Defense Secretary Robert Gates is expected to make an announcement today about whether the Air Force will reopen the bidding for the $35 billion tanker program. Boeing Inc. (NYSE: BA) thought it had a lock on it but earlier in the year, the Air Force awarded the contract to EADS, parent of Airbus, and Northrop Grumman (NYSE: NOC). Boeing protested and last month, the General Accounting Office (GAO) reported that the award process was flawed.

That should come as no surprise. After all, Senator John McCain (R-AZ) was pushing for the European company to win the competition -- possibly since his then national finance chairman lobbied for that company. One of the sources I spoke with said that people suspect McCain arranged for a change in Tanker specifications to tilt the playing field in favor of EADS. This source also said that the Air Force neglected to notify Boeing of the change. Evidently, the GAO agreed that something was fishy here. It would be at least the fifth time that McCain had been influenced by lobbyists.

Now attention turns to Gates and Congress which hosts a battle between Senators from Washington, where Boeing has operations, and Alabama, where Northrop employs workers. BusinessWeek quotes Senator Patty Murray (D-Wash.), who introduced a Senate resolution on July 8, calling on the Pentagon to rebid the flawed tanker contract, as saying: "The GAO's decision was clear, and today we are reiterating that message so that the Pentagon knows there is no wiggle room. It's time to go back and hold a truly transparent competition that does our war fighters and taxpayers justice."

Focus LLC, investment banking service provider, has announced the acquisition of U.K. based Avialec by Kapco-Valtec, in a move aimed in part at expanding Kapco-Vatec's marketing base. Avialec, based in Petersfield, England, is a provider of electrical components to the aerospace industry. Building on eight years of growth, Avialec company leadership sought the benefit of increased aerospace industry clout which Kapco-Valtec presents.

Barrie Prescott, CEO of Avialec stated in the Focus LLC press release, "I had decided it was time to put Avialec under the wing of a larger progressive organization with financial firepower to realize the many opportunities before us ... FOCUS was the perfect firm to help us realize our goals."

Kapco-Valtec, a leader in aerospace supply chain management, shall provide market leverage for Avialec to realize it's expected growth potential, while gaining the benefit of greater exposure to Avialec's major accounts in the U.K. Likewise, Kapco-Valtec shall provide broader exposure of Avialec to U.S. aerospace accounts.

The Focus LLC investment bankers press release stated: "As is the case with the growing number of international M&A transactions, this deal is a win-win for both companies. We were pleased to be able to complete the transaction in just over four months, said Manan Shah, a FOCUS Partner."

For further information regarding this acquisition and the services of Focus LLC, please visit the Focus website at www.focusbankers.com.

Readers of this space know that my investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, Parker-Hannifin is worth a review.

Parker-Hannifin (NYSE: PH) is one of the world's largest makers of components that control the flow of industrial fluids; control systems for machinery/equipment; motion control products; fluid purification, fluid and fuel control; process instrumentation; air conditioning / refrigeration; electromagnetic shielding; and thermal management products and systems.

In general, analysts expect PH to register 10-14% revenue growth in F2008, on solid growth in industrial and aerospace work, internationally. Moreover, the global aerospace growth cycle is expected to continue through 2008 and into 2009, netting impressive results for PH.

Further, although the majority of PH's revenues is U.S.-based, and those division will not achieve their peak performance due to the barely-growing U.S. economy, Parker's international industrial/business segment is expected to continue to benefit from emerging market / developing economies work.

Readers of this space know that the investment bias is toward large-cap companies who have a competitive advantage in established markets, preferably with a favorable global trend as a support. With this in mind, Goodrich Corp. is worth a review.

Goodrich Corp. (NYSE: GR), formerly a tire maker (the company without the blimp), is now an aerospace services company, providing both parts and service for engines, airframes, electronic systems, and other aircraft systems.

Analysts see double-digit revenue growth for GR in 2008 and 2009, aided by favorable sector trends, including strong international, cyclical demand for jets and increased jet use, and an aging jet fleet in the U.S.

Further, GR is also using strong cash flow to expand maintenance, repair and overhaul facilities.

Analysts also like the fact that GR is moving manufacturing to low-cost areas and implementing efficiency projects. The Reuters F2008/F2009 EPS consensus estimates for GR are $4.34/$4.95.

Investors were pleased with the earnings news from specialty metals manufacturer Allegheny Technologies Incorporated (NYSE: ATI). They bid the stock up some 6% Tuesday, January 29 despite the fact that shipments and operating profits in 4Q2007 slipped and are expected to continue to be soft in 1Q2008.

For the year, Allegheny Technologies posted record sales of $5.45 billion, up 10%. Net income shot up 30% to a record $747 million. Cash flow increased by $121 million so that the company has more cash than debt, operating profit increased by 23%, EPS hit $7.26, and international sales topped $1.5 billion, another record. As a result, Allegheny Technologies initiated a half-billion dollar stock buy-back program and raised the dividend for the third straight year.

Overall, the picture looks good, but there are some negatives. Raw material costs continue to increase. Demand for stainless steel products was "extraordinarily weak," offset in part by stronger demand for tungsten and tungsten carbide products. Demand remains strong in the commercial aerospace and defense segments which results in strong demand for titanium based products for aircraft frames. Supply chain uncertainties with the Boeing 787 Dreamliner, however, may curtail operating profits in that segment.

Given its diverse product offerings, its expanding joint centure in China, Allegheny Technologies appears able to withstand whatever the U.S. economy will do in the coming months.

Eaton Corporation (NYSE: ETN) manufactures electrical systems and components for fluid power systems for industrial, automotive and aerospace industries. While the stock market continues to gyrate, Eaton continues to post solid results quarter after quarter. 4Q2007 results proved no exception. Across the board, numbers are up. Net income increased 6% to $256 million, sales grew by 10% due to both acquisitions and organic growth. Operating earnings increased 7% to $269 million. The story is the same for FY 2007 results.

The bulk of Eaton's growth and profits for 2007 came from outside the U.S., which remains a weak market, particularly in the NAFTA truck segment, which declined 14%. To offset this decline, European medium-duty truck production increased 12% and Brazilian agricultural equipment, still a small market, increased 63%. Electrical and fluid power segments each posted sales increases of 17%. Operating profits in these segments increased by 17% and 37% respectively. Aerospace segment grew by 6%.

Eaton CEO Alexander Cutler forecasts overall revenue growth at 25% for 2008, due both to organic growth as well as continued acquisitions. Operating earnings per share for 2008 are forecast at $7.75-$8.25. With the stock price right around $80 per share, coupled with an annual dividend of $0.50 per share, conservative investors may wish to take a look at Eaton as a safe place to park money.

China introduced its first domestically manufactured regional jet Friday as the nation attempts to enter the crowded regional jet manufacturing marketplace to meet its jet needs, Reuters reported.

The ARJ21-700, or Advanced Regional Jet of the 21st Century, is being built by state-operated manufacturer AVIC I, which also makes fighter planes and bombers, Reuters reported.

Analyst C. Leonard Bauer, formerly of Prudential, told BloggingStocks on Friday that while China's introduction of the ARJ21-700 is a historic moment for Chinese aerospace development and engineering, the company and airplane manufacturing process in the world's most populous country still faces formidable hurdles.

Chief among these will be strong competition, Bauer said. Canada-based Bombardier and Brazil-based Embraer (NYSE: ERJ) are two manufacturers in the sector with demonstrated proficiency, he said, and it's unlikely that AVIC I will be able to match flight performance for at least five to seven years.

"More than likely, China's aviation officials will concentrate solely on China's market, which is what they should do, as there's not likely to be many foreign orders for the ARJ21-700 for at least a half decade," Bauer said. "Aviation is a big 'known-commodity' business, which means it will be some time before the ARJ21-700 builds a foreign order book."

It's a Wall Street axiom, but one that's worth repeating in choppy markets: diversity provides greater safety. That's diversity across a portfolio, and diversity within a company, and a good example of the latter is Honeywell International Inc. (NYSE: HON).

Thermostats and aircraft maintenance would seem like business lines at opposite ends of the spectrum, but they are at Honeywell's core, and they speak to the company's strength.

Analysts like HON's aerospace division (36% of revenue), which manufactures cockpit controls, power generation equipment, and wheels/brakes for commercial/military aircraft. The division also makes jet engines for regional/business jet manufacturers.

Further, analysts really like HON's automation/control division (35% of revenue), which makes home/office climate control equipment. Analysts see solid demand for HON's next-generation energy-efficient controls as businesses and homeowner re-emphasize energy efficiency, due to high energy prices. The Reuters F2007/F2008 EPS consensus estimates for HON are $3.16 to $3.73.

Boeing announced Tuesday that it is still on track to fly its first 787 Dreamliner in Q1 2008 and deliver the plane to its first customer, All Nippon Airways, by the end of 2008, The Wall Street Journal reported (subscription required).

Boeing (NYSE: BA) also confirmed full-build 787 aircraft production plans. Earlier this year, Boeing delayed delivery of the 787 by six months to about December 2008, instead of May 2008, due to a parts shortage and also to complete additional work previously assigned to contractors, Bloomberg News reported. Boeing's shares were down 40 cents to $92.33 in Tuesday mid-day trading.

Boeing has 762 orders for the 787, valued at about $120 billion. Analysts view an aerospace company's ability to deliver planes on time as critical to the company's future prospects, due to the high cost airlines incur for delayed planes. Delayed plane deliveries also discourage future plane orders, analysts generally agree.



In addition to the 787's next-generation passenger amenities and substantially improved fuel efficiency, the plane also serves as a touch-point in the aerospace battle between Boeing and Airbus.