Boeing also said it would deliver more commercial planes than originally planned for the year and that cash flow will keep rising through the end of the decade.
Boeing held off cutting production of its profitable 777 jets to account for slowing sales and the transition to the successor 777X, as some analysts expected.
Boeing already plans to cut 777 production to 7 a month next year from 8.3 currently. If Boeing went to 5 planes a month, it would have sold 90 percent of production slots in 2018, Chief Executive Officer Dennis Muilenburg said on a conference call.
"I see that as a bounding case," he said, meaning the production rate would not need to go lower.
In that scenario deliveries would fall to about 3.5 a month.
Boeing will have more clarity in the next couple of months after pending sales campaigns conclude, Muilenburg added.
Factoring out a tax benefit, Boeing's rise in quarterly profits showed the effect of its drive for lean manufacturing as it tries to boost profit margins and compete for orders against European rival Airbus amid slowing jetliner sales.
Boeing's revenue is likely to be flat to slightly lower next year, Chief Financial Officer Greg Smith said.
STRONG CASH FLOW
Operating cash flow rose 12 percent to $3.2 billion (2.61 billion pounds) and Boeing affirmed its target of $10 billion or more this year.
Analysts said the cash would reassure investors, but added that the stock has limited upside after a recent rally.
"Sentiment and positioning (in the stock) do not appear particularly negative and we do not believe the stock is set up to run away," JP Morgan analyst Seth Seifman wrote in a note.
Boeing shares fell as much as 1.7 percent to $136.72 early in the session but later rose 4.7 percent to $145.52 on the New York Stock Exchange.
Jetliner deliveries were down nearly 3 percent from a year ago, reflecting fewer profitable 777 and 737 models reaching customers. But Boeing raised its target for jetliner deliveries for the year to between 745 and 750, from 740 to 745.
The additional planes will boost revenue by $500 million, and Boeing raised its year-end revenue target to between $93.5 billion and $95.5 billion.
The closely watched deferred production cost balance for Boeing's 787 Dreamliner, a tally of manufacturing costs not yet recouped by sales, declined about $150 million in the quarter to $27.5 billion, reflecting the fact that the high-tech plane is now profitable by some accounting measures. The balance peaked at $28.7 billion in the first quarter and has since declined.
Boeing is curbing the use of paid overtime by 80,000 salaried workers based in the United States.
Revenue and profit fell in Boeing's defence business, partly an effect of the discontinued C-17 transport plane.
Boeing's adjusted earnings, which exclude some pension and other costs, rose 39 percent to $3.51 per share, including a tax gain of 70 cents a share it received by claiming more depreciation than it had previously.
Factoring that out, core earnings were $2.81 a share, compared with the $2.62 that analysts expected, according to Thomson Reuters I/B/E/S.
Revenue fell to $23.90 billion from $25.85 billion in the quarter.
(Reporting by Alwyn Scott in New York and Ankit Ajmera in Bengaluru; Editing by Shounak Dasgupta and Jeffrey Benkoe)
By Alwyn Scott