NEW YORK ( TheStreet) -- Over the past three months, Empresa Brasileira de Aeronautica (Embraer) ( ERJ) gained 14.0%, whereas Boeing ( BA) gained only 1.1%. Embraer will likely continue outperforming Boeing for 2010, as Embraer sees increasing backlog while Boeing is witnessing decreasing backlog.Embraer, the world's fourth-largest aircraft maker, derives 53% of revenue from commercial aviation, while defense and executive aviation account for 19% and 12% of revenue, respectively. Embraer expects a backlog of more than $17 billion by the end of 2010, an increase from the backlog of $15.2 billion at the end of second quarter. The company won 37 firm orders at the Farnborough Air Show in England last month. In comparison, Embraer's close competitor Bombardier won nine orders during the air show. In the past three months, Embraer rose 18.8% in Sao Paulo in comparison to the 7.9% gain in Brazil's Bovespa index. Over the same period, Bombardier declined 3.4% in Toronto compared to a 0.6% decline in the S&P/TSX Composite Index. Another direct competitor of Embraer, Dassault Aviation witnessed order cancellations during the first-half and expects new orders to take time. Dassault still needs to reach the productivity level of its American peers. On the other hand, recovery in commercial aviation during 2010 resulted in new orders for Embraer. At end of second quarter, net cash position stood at $659 million from $236 million, and loan position declined to $1.5 billion from 1.8 billion, indicating strengthening financial position. Before announcement of the second quarter results on Tuesday, Embraer was upgraded at Credit Suisse ( CS) to "outperform" from "underperform"; JP Morgan ( JPM) to "neutral" from "underweight"; and Banco Santander (Brasil) ( BSBR) to "buy" from "neutral". During second-quarter earnings release, the company increased its revenue guidance for 2010 by 5% to $5.25 billion. The firm order backlog at the end of the second quarter was $15.2 billion, equivalent to three years of the current annual revenue. In comparison, ATR, another direct competitor of Embraer, has backlog for only two years. ATR is a join venture between European aerospace companies Alenia Aeronautica (a Finmeccanica company) and EADS. Boeing witnessed a decline in backlog to $312.3 billion at the end of second quarter from $314.8 billion at the end of first quarter. In addition, Boeing saw cancellations including for 26 aircrafts (one 737, 10 777s and 15 787 Dream liners) valued at $5.82 billion past week. The Dream liners' order cancellation came from Dubai Aerospace Enterprise.