NEW YORK (CNN/Money) - Aircraft maker Boeing Co. Thursday reported sharply lower fourth-quarter earnings that met Wall Street expectations, but the company lowered its earnings and revenue guidance for this year and said it's not looking for a recovery in demand for aircraft and profits until 2005.

The company earned $571 million, or 71 cents a share, excluding special items, down from the $722 million, or 90 cents a share, it earned on that basis in the year-earlier period. That met the consensus forecast of analysts surveyed by earnings tracker First Call. Including special items net income came in at $590 million, or 73 cents a share, up from $100 million, or 12 cents a share, a year ago, when it took a charge for Sept. 11-related downsizing.

Revenue fell to $13.7 billion from $15.7 billion a year before. While that beat First Call's forecast of $13.5 billion, the company lowered its 2003 revenue guidance to $49 billion from its earlier target of $50 billion.

The company also said it expects to earn $1.90-to-$2.10 a share in 2003, down from the $2.84 a share it earned before special items in 2002, and below the First Call forecast of $2.20. In 2004 it expects EPS of $2.10-to-$2.30, which also misses the First Call forecast of $2.74.

Phil Condit, chairman and CEO of Boeing, talks about his company's tough quarter, revenue and plans for recovery. Play video (QuickTime, Real or Windows Media)

Aircraft deliveries are expected to fall to 280 this year, from 381 delivered in 2002. That puts Boeing to be on course to lose its title of the world's largest maker of commercial aircraft to European competitor Airbus Industrie. Airbus has projected deliveries of about 300 aircraft, roughly level with the 303 it delivered in 2002.

Condit conceded that Boeing will likely trail Airbus this year, but said the company's cutback in production is the right decision given the weaker market.

"They [Airbus] tended not to drop their production," said Condit while on CNNfn's Money Gang. "We think from an economic standpoint, from a shareholder-return standpoint, we're doing exactly the right thing."

Boeing sees 2004 deliveries of between 275 to 300 aircraft in 2004, with a market recovery beginning in 2005.

Boeing Chairman and CEO Phil Condit said the company's projects anticipate a short war between the United States and Iraq, and that a prolonged conflict could hit results more severely. But he said the company is well positioned to deal with the downturn in the U.S. airline industry, even if there are additional bankruptcies among major U.S. carriers, or if one or more major carriers is forced to halt operations.

"On a global scale, there is a certain level of demand (for air travel)," he said in response to a question. "If an airline were to go chapter 7 and liquidate, from a fundamental standpoint it wouldn't change that demand. It would just shift around assets. Aircraft are a relatively mobile asset."

Condit said that he won't be surprised if there are additional bankruptcies in the U.S. airline industry, though he wouldn't comment on outlooks for specific carriers.

"There is nothing fundamentally different in that area than what we saw a year ago," he said. "I got in trouble at that time for saying there would be bankruptcies." Two major carriers -- United Airlines and US Airways Group -- filed for bankruptcy protection last year.

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Condit said Boeing is helped by the fact that about two-thirds of its backlog of commercial aircraft orders are to non-U.S. customers, and that air travel demand had rebounded much quicker in Asia and Europe than it has in the United States. He also says that Boeing is doing well with low-cost carriers, who generally prefer to stick with one aircraft type as a way of controlling maintenance and pilot training costs. While Boeing has lost some low-fare carriers, including JetBlue and British carrier easyJet, it continues to be the sole suppliers to a number of major discount carriers, including Southwest Airlines and RyanAir.

"We've clearly done very well in that market. We've got great share, we understand that market," he said. "I think it (the growth of discount carriers) is a positive for us."

Condit conceded that the company's commercial satellite business, which is affected by the downturn in telecom spending, has also had disappointing results. But he said that the company's military and defense division is beating targets and should continue to show strong growth.

Shares of Boeing (BA: up $0.26 to $30.87, Research, Estimates), one of four components of the Dow Jones industrial average set to report results Thursday, gained ground in midday trading Thursday.