Stocks were mixed in early afternoon trading Wednesday, with the Dow Jones Industrial Average (DJINDICES:^DJI) down 35 points while the S&P 500 (SNPINDEX:^GSPC) stood just over breakeven after earlier setting another intraday all-time high.

Boeing (NYSE:BA) took the steepest dive on the Dow, dropping 2.6% after reporting second-quarter earnings. The company actually beat analyst expectations for earnings handily, reporting $2.24 in earnings per share versus the consensus estimate of $2.02. 

Excluding certain nonrecurring expenses, earnings would have been even higher at $2.42 per share.

Investors were unimpressed with Boeing's top line, though. Revenue was $22 billion for the quarter, missing estimates by about $300 million. The potential for another budget fight on Capitol Hill has analysts concerned about the medium-term revenue prospects for the company.

Boeing's defense, space, and security division saw revenue declines across all of its major segments -- evidence enough for investors that government spending cuts or a political fight over fiscal policy could seriously hurt the company. Operating margins in this division shrank 2% as top-line revenue declined about 5% year over year.

A common problem across the industry
Last week, competitor Lockheed Martin (NYSE:LMT) faced similar concerns after reporting its own strong second quarter. Lockheed reported earnings per share of $2.76, beating estimates by about $0.10. 

Lockheed reported only a slight 0.9% decline in year-over-year sales. The company's aeronautics division was the primary driver, with sales increasing 13% year over year. 

The information systems, missiles and fire control, and space systems units all saw sales decline by at least 7%. The mission systems and training division reported more or less flat top-line performance.

LMT Revenue (Quarterly) data by YCharts.

A bright spot
While concerns about government spending persist, the commercial airline industry is showing signs of strength. For Boeing, this resurgence from public companies may be enough to offset a short- or medium-term blip in the government business.

Boeing's commercial airlines division saw revenue rise 5% alongside a 10-basis-point improvement in operating margin. The division delivered 181 aircraft in the quarter, a 7% improvement from the second quarter of 2013.

The backlog of new orders also increased to 5,200 airplanes, valued at an all-time high $377 billion, a positive sign for future quarters. Boeing took orders for 264 airplanes in the quarter.

Boeing 747 compared with the space shuttle Enterprise.

Management pointed to rising demand from the emerging markets -- primarily China -- as the key driver of this growth. Secondarily, established airlines are increasingly purchasing new aircraft to replace older, less fuel efficient models.

Looking five years down the road
For Boeing, the story today is likely to drive the company for the foreseeable future. Boeing will probably continue to see lagging revenue from its government business. The U.S. has already wrapped up its war in Iraq and is preparing to withdraw from Afghanistan. The next three years will also see midterm elections and a presidential election. Fiscal policy will undoubtedly take center stage.

The key for Boeing is the commercial airline business and finding new customers for its high-tech aviation products. That means continuing to make inroads into emerging markets, continuing to develop more fuel-efficient and profitable airplanes for commercial customers, and continuing to manage costs to boost earnings as much as possible.