Like peer and competitor Lockheed Martin (NYSE:LMT), Boeing (NYSE:BA), a name synonymous with commercial flying machines, is finding that airplane biz just isn't where the biggest money is. A quick walk through last week's earnings report shows revenues were down 8% in that segment, which might be a bigger drag if operating margins in the 3.6% range weren't already the bottom of the Boeing heap.

The gravy at Boeing these days comes from defense contracts, a situation shared by other military contract titans such as Northrop Grumman (NYSE:NOC) and General Dynamics (NYSE:GD). Integrated defense systems revenues were up 13% for Boeing, coming to $8.3 billion for the quarter. The biggest gain came in network systems, which posted a 39% sales jump to overtake aircraft and weapons, where growth was a slimmer 4%. But the amount that trickled down to earnings from operations was still heartiest in the weapons segment, owing to its healthier, near-16% operating margins.

Though management raised full-year guidance for 2004 based on expected decreases in taxes, most of its previous predictions remained. Longer-term earnings targets of $2.48 for 2005 represent very modest 8% growth over the $2.30 expected this year. That means the firm currently trades at about 22 times this year's earnings, and 19 times the 2005 estimate. That looks a bit rich.

On an enterprise value-to-free cash flow basis, it looks only a tiny bit better, trading at 19 times this year's estimate, and 13 times the predictions for 2005. But predictions are just that, so investors who have seen a decent return against the overall market should ask themselves whether there aren't better places for their money.

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Seth Jayson likes flying Boeing, but he can sit out the stock. At the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here . Fool rules are here .