The Boeing Company (BA) Earnings & Analysis

Latest quarter

Boeing reported Q2 FY2026 revenue of $24.6 billion, up 7.96% from $22.7 billion a year earlier. The company’s revenue was above the consensus of $24.1 billion, which counted reported revenue as 2.11% above consensus. Boeing reported diluted EPS of −$0.67, compared with −$0.92 in Q2 FY2025, while core EPS of −$0.76 missed the consensus.

The company said revenue growth reflected higher deliveries and favorable mix at Commercial Airplanes, where it delivered 171 airplanes, and higher volume at Defense, Space & Security. Boeing said Commercial Airplanes revenue was $11.8 billion and Defense, Space & Security revenue was $7.5 billion during the quarter. The company reported an operating margin of 0.64%, versus −0.77% a year earlier, while gross margin was 9.83%, compared with 10.7%. Boeing reported free cash flow of $632.0 million, compared with −$199.0 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Kelly Ortberg said Boeing’s commercial certification programs remained on plan and that the FAA had authorized the company to resume issuing airworthiness certificates for all 737 MAX and 787 airplanes. He said testing for the 737-7 was complete and Boeing expected an amended type certificate soon; the company expected certification of the 737-10 to follow. Ortberg said both variants were expected to begin deliveries in 2027, while the 777-9 remained on plan for first delivery in 2027.

On production, Ortberg said Boeing was ramping the 737 toward 47 airplanes per month and had begun low-rate production on a new line. He told analysts that Boeing would use performance at rate 47 to inform the move to 52 per month, adding that the supply chain would need to perform as output rose from 52 to 57 and beyond. Ortberg said wings were an internal production area requiring improvement. He also said the 787 program had stabilized at eight airplanes per month, while engine-delivery recovery remained relevant to the timing of a move to rate 10.

Jay Malabe said Commercial Airplanes delivered 171 airplanes in the quarter and that its operating margin of negative 2.7% improved primarily through delivery volume and mix. He said the company expected delivery cadence, fixed-cost absorption, pricing and mix to support program cash margins over time, but did not quantify nearer-term margin targets.

At Defense, Space & Security, Ortberg said Boeing added resources to the VC-25B program and shifted it from FAA to military certification, resulting in a $280 million charge during the quarter. In response to an analyst question about fixed-price-program risk, he said the KC-46 program had low risk for further estimate-at-completion adjustments, while Boeing continued to work with NASA on the timing of Starliner launches.

Malabe said free cash flow exceeded the company’s earlier expectation because of receipt timing. Asked about the second half, he said delivery performance, Defense, Space & Security execution and customer advances would be the main drivers, while Boeing would provide more detail on 2027 after completing its planning cycle.

Guidance

Boeing did not announce revised FY2026 delivery targets on the call. Jay Malabe said the company remained on track to deliver 500 737 airplanes and 90 to 100 787 airplanes in 2026. He also said Boeing remained on track for free cash flow of $1 to $3 billion in 2026 and expected third-quarter free cash flow to be positive in the low hundreds of millions of dollars after a planned payment.