US aircraft maker Boeing has reported a 14% slide in quarterly profits, citing higher pension costs.
Boeing is looking to leave its recent troubles behind
The drop in earnings was less than analysts had forecast as the firm benefited from a one-off tax payment.
Boeing said that profit in the first three months of 2005 was $535m (£280m), against $623m a year earlier. Sales were little changed at $13bn.
Boeing has lost its position as the world's largest maker of passenger aircraft to pan-European firm Airbus.
When asked if Boeing had expected the Airbus A380 superjumbo, which made its maiden voyage on Wednesday, to get off the ground, Boeing chief executive James Bell Boeing said: "Of course we thought it would fly, that is what aircraft are made to do.
"But we thought our bet on the mid-range (airline) market was a better bet, and still do."
Airbus sees large planes such as the A380 as the future of air travel, while Boeing has chosen to focus on mid-sized long-haul aircraft such as its new 787 or Dreamliner. "The investment in our growth is blue and white," Mr Bell said.
"It's called the Dreamliner, that's where our future lies."
In its first quarter, however, costs relating to the sale of Boeing's Electron Dynamic Devices (EDD) business weighed on earnings.
It said that pension costs had more than tripled from a year earlier, reaching $223m, partly due to the disposal of EDD.
It also faced additional costs related to new accounting methods. There could be further pension costs later in the year if Boeing is successful in selling off two more businesses.
On an operational level, the company said it is performing strongly.
Its defence division said sales rose 2% to $7.5bn in the quarter, while operating profit increased by 15% to $847m.
The St. Louis-based business accounts for 58% of Boeing's total earnings.
Boeing's commercial aeroplane business saw sales dip 5% to $5.1bn as deliveries fell to 70 from 76 a year earlier.
However, the company does have a strong order pipeline for the 737, with Heidi Wood, an analyst at Morgan Stanley, saying that the Boeing 737 was sold out for 36 months in advance.
Operating profit, however, jumped 11% to $389m.
Despite increased competition from Airbus, Boeing this week announced $13bn worth of new contracts with Air India and Air Canada.
Shares in Boeing lost 1.2% in early trading in New York on Wednesday.