The Boeing Co. [BA] saw its network and space systems unit advance operating margin profit by 7.7 percent, but lower earnings from the United Launch Alliance joint venture with Lockheed Martin Corp. [LMT] dulled the performance, Boeing announced.

The company, the second-largest defense contractor, released its results for the January-March quarter of this year.

Further, year-earlier results included a favorable settlement on a satellite program.

Boeing also was wary in commenting on Secretary of Defense Robert Gates’ proposed defense budget for the fiscal year ending Sept. 30, 2010.

Gates slashed a myriad of Boeing-led programs, including the Airborne Laser, European Missile Defense and Ground-based Midcourse Defense systems. He also killed the C-17 transport plane, wiped out more than $80 billion worth of vehicles in the Army Future Combat System, and killed the combat search and rescue helicopter contract that Boeing had won (but which was contested).

Boeing also hoped to win the Transformational Satellite contract, but the program also got the ax. President Obama can reverse Gates on any of these proposed cuts, as can Congress. It was a brutal budget for Boeing.

"Boeing will be evaluating the defense budget as it progresses through Congress to determine the potential future effects on our business outlook," Boeing stated. "The company has been anticipating changes in the U.S. defense budget for some time."

Obama’s victory in the election last year puts a Democrat in the White House for the first time in eight years.

Boeing said its integrated defense unit still is "well-positioned with a diverse portfolio of defense, space and security programs, and will increase its focus on international defense opportunities and pursuit of adjacent markets in the U.S." Translation: if the Pentagon won’t buy a system, perhaps a foreign military will. Or, if one U.S. armed service won’t buy a product, perhaps another American service would buy it.

Boeing integrated defense should bring in $33 billion to $34 billion of revenue this year, with operating margins of about 10 percent, Boeing estimated.