largest commercial aircraft maker behind Airbus, is also the second-largest U.S. defence contractor. Sales in the first two quarters of the year were up 8 per cent to 27 billion dollars. Earnings dropped 10 per cent to 1.1 billion dollars due to one-time charges related to its commercial aircraft operations, but that didn't dampen the company's outlook. Boeing's military division posted sales of 15.3 billion dollars in January-June, an increase of 5 per cent. Operating profits rose 16 per cent to 1.7 billion dollars. Another big prize would be a U.S. government contract for mid-air refuelling tankers, where Boeing is competing with the European Aeronautic, Defence and Space Company (EADS). Boeing also coordinates Future Combat Systems (FCS), an ambitious 125-billion-dollar project aimed at making U.S. soldiers more effective on the battlefield by integrating new weapons and communications systems. Almost all U.S. defence contractors are participating. At the end of June, Boeing had military orders of 85.7 billion dollars. Northrop Grumman, which specializes in warships, warplanes, information technology and space, has 57.1 billion dollars on its order books. Half-year earnings rose from 534 million dollars to 776 million last year on a decline in sales to 13.4 billion dollars from 13.4 billion dollars. Raytheon, best-known for military electronics and weapons systems, saw sales rise 8 per cent in the first half of the year to 10.4 billion dollars, while earnings soared from 20 million dollars to 367 million. Raytheon has orders totalling 34.6 billion dollars. General Dynamics, which makes warships, tanks and ammunition, increased its six-month sales 7.9 per cent to 10 billion dollars, and its earnings by nearly 20 per cent to 681 million dollars. It had 43.6 billion dollars' worth of orders at the end of June. --SP 1346 Local Time 1046 GMT
