Defence business faces tough environment: Boeing chief

[NEW YORK] Boeing Co expects its defence business to continue facing a tough environment with "flatish" profit margins, chief executive Jim McNerney said on Wednesday.

A recent federal government budget deal has pushed off automatic spending cuts known as sequestration by two years, but "sequestration has not gone away", Mr McNerney said at a Cowen & Co investment conference.

In contrast, the commercial jetliner business is better than Mr McNerney has seen it in his career, which includes time running General Electric Aviation, the maker of aircraft engines. Commercial aircraft business margins have room to widen, he said, due to faster jet production and the ability to get better prices from suppliers.