Boeing defied both critics and analysts in announcing a profit for the third quarter last week. The aerospace giant outperformed analyst projections that lingering Asia troubles and production problems would once again negatively affect earnings.

Boeing reported a profit of $347 million on sales of $12.7 billion for the quarter. Compared with last year's results at this time, a net loss of $696 million on sales of $11.4 billion, it appears that Boeing has begun to overcome some of the "abnormal production inefficiencies" affecting last year's production line. Boeing also says it's delivered more aircraft during the quarter compared with last year at this time (123 planes this year versus 89 a year ago).

Also helping matters is that Boeing received some tax concessions, amounting to $57 million, related to its defense business that provided a welcome boost to this quarter's earnings.

However, analysts say that Boeing still is not out of the woods as far as Asia is concerned. There are still 36 Boeing airplanes parked in the Arizona desert waiting for Asia-based customers to find financing to pay for them. If these airplanes aren't placed soon, Boeing is unlikely to make its projected delivery number of 550 for full-year 1998. Boeing Commercial Airplanes president Alan Mulally also predicts more orders will be lost due to the Asian financial crisis than originally planned. Widebody deliveries are most at risk, and Boeing has reduced production rates on its 747 and 777 lines accordingly.

In addition, the overall profit margin for the commercial aircraft program is still lower than Boeing would like, despite the higher number of sales and deliveries. The mix of models sold, continued pricing pressures from new aircraft programs and lower price-escalation trends continue to keep margins low. No profit has yet been recognized for the Next Generation Boeing 737 line, for which losses have already been taken, including $350 million pretax in the first quarter of 1998.

That said, Boeing chairman Phil Condit still projects full-year earnings to be slightly above $1 billion on consolidated revenue of $56 billion. Net earnings for 1999 are expected to be in the $2 billion range, based on comparable revenue rates and current plans and schedules.