Aerospace giant Boeing Co. (BA) reported a 78 percent jump in third-quarter earnings, buoyed by a strong defense business, and raised its estimate for full-year profits due to a favorable tax outlook.

The results announced Wednesday handily beat Wall Street's expectations.

Net earnings were $456 million, or 56 cents per share, up from $256 million, or 32 cents per share, a year earlier. Analysts polled by Thomson First Call had anticipated earnings of 40 cents per share.

Revenues rose 8 percent to $13.2 billion from $12.2 billion, easily topping the Wall Street consensus estimate of $12.5 billion. The defense and space unit accounted for 63 percent.

Citing lower tax expense than expected in the third quarter, the company raised its estimate of 2004 earnings by 15 cents a share to a range of $2.40 per share and $2.60 per share. It said it had tax refunds and adjustments totaling 50 cents per share in the first three quarters.

Boeing left unchanged its estimates of fourth-quarter revenue and 2005 earnings and revenue.

The defense business remained highly prosperous despite the ethical scandals that have scrapped a $23 billion deal to provide new refueling tankers for the Air Force (search) and put other contracts in jeopardy. Nearly two-thirds of its revenue and most of its profits in the quarter came from the defense and space unit.

"Our Integrated Defense Systems business again delivered strong revenue growth and outstanding profitability, and made significant progress on key programs," said CEO Harry Stonecipher (search).

The defense division generated nearly $8.3 billion in revenues, up 13 percent, and accounted for $816 million in earnings from operations.

The once-dominant commercial airplane unit, meanwhile, saw revenues decline another 8 percent to $4.6 billion despite increasing its deliveries to 67 airplanes in the quarter, which Boeing attributed to a higher proportion of smaller 737s in that total. The Seattle-based division had operating earnings of $168 million.

The company left unchanged its 2004 forecast of approximately 285 deliveries but said it now expects to deliver about 320 airplanes in 2005 — at the high end of its previous range. Despite the current struggles of its airline customers amid soaring fuel costs and other challenges, it said global commercial airplane markets are improving and further recovery is expected in 2006.

For the first nine months of the year, net earnings were $1.7 billion, or $2.07 per share, compared with a loss of $414 million, or 52 cents per share, a year earlier when results were weighed down by charges reflecting the severe aviation slump. Revenues increased 6 percent to $39.1 billion from $37.1 billion.