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BC

BOEING CO (BA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue rose 35% year over year to $22.7B; GAAP diluted EPS was ($0.92) and core loss per share was ($1.24). Operating cash flow was $0.23B and free cash flow was ($0.20)B .
  • Results beat Wall Street on revenue and slightly on EPS: revenue $22.75B vs $21.61B consensus; core EPS ($1.24) vs ($1.27) consensus; strength came from higher deliveries and mix, including 13 777 deliveries (+$700M FCF benefit in Q2) * [functions.GetEstimates]* .
  • Commercial margins improved as 737 production reached 38 per month and 787 advanced to 7 per month; BDS turned to positive operating margin (1.7%) on stabilizing performance; BGS delivered 19.9% margins .
  • Management guided to Q3 free cash flow usage similar to Q2 (before a potential $700M DOJ payment), and positive Q4 free cash flow; full-year 2025 free cash flow around ($3B) with positive exit momentum .
  • Potential catalysts: FAA authorization to lift 737 above 38/month later in 2025; continued widebody delivery mix; tariff relief deals (“zero for zero”) improving input costs and demand environment .

What Went Well and What Went Wrong

What Went Well

  • Sequential operational stabilization: 150 commercial deliveries, 737 at 38/month, 787 at 7/month; “we delivered higher quality airplanes” and KPIs “all green” on 787 after rate increase .
  • BDS margin inflection: revenue $6.6B, operating margin 1.7% vs (15.2%) a year ago; progress on MQ‑25 ground testing and T‑7A milestones .
  • Services strength: BGS revenue $5.3B (+8% y/y), operating margin 19.9% with a Gatwick MRO sale and P‑8A training contract win; “BGS remains a terrific long‑term franchise” .

What Went Wrong

  • Unallocated charge of $445M tied to May 2025 DOJ non‑prosecution agreement weighed on results; effective tax rate was (9.1%) in Q2 .
  • BCA still negative margins: operating margin (5.1)%, with continued rework and certification delays pushing 737‑7/‑10 certification into 2026; “engineering designs have not yielded” for engine anti‑ice solution .
  • Free cash usage remains a headwind; Q2 FCF was ($0.20)B, and Q3 expected similar usage before any $700M DOJ payment, keeping full‑year 2025 in cash usage despite improving deliveries .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$16.866 $15.242 $19.496 $22.749
GAAP Diluted EPS ($)($2.33) ($5.46) ($0.16) ($0.92)
Core Loss per Share ($) (non-GAAP)($2.90) ($5.90) ($0.49) ($1.24)
GAAP Operating Margin (%)(6.5)% (24.7)% 2.4% (0.8)%
Operating Cash Flow ($USD Billions)($3.923) ($3.450) ($1.616) $0.227
Free Cash Flow ($USD Billions) (non-GAAP)($4.327) ($4.098) ($2.290) ($0.200)

Segment breakdown

SegmentQ4 2024 Revenue ($B)Q4 2024 Op Margin (%)Q1 2025 Revenue ($B)Q1 2025 Op Margin (%)Q2 2025 Revenue ($B)Q2 2025 Op Margin (%)
Commercial Airplanes (BCA)$4.762 (43.9)% $8.147 (6.6)% $10.874 (5.1)%
Defense, Space & Security (BDS)$5.411 (41.9)% $6.298 2.5% $6.617 1.7%
Global Services (BGS)$5.119 19.5% $5.063 18.6% $5.281 19.9%

KPIs and balance

KPIQ2 2025Reference
Commercial deliveries (units)150 total; 737: 104, 787: 24, 777: 13, 767: 9
Total backlog ($B)$618.5B total; BCA $522.2B, BDS $74.0B, BGS $21.9B
Cash & investments ($B)$23.0B (vs $23.7B at Q1)
Consolidated debt ($B)$53.3B (down from $53.6B at Q1)
737 monthly rate38/month achieved; plan to stabilize then request 42/month later in 2025
787 monthly rate7/month; KPIs “all green” post capstone review

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
737 production rate2025Ramp to 38/month target by 2025 Stabilize at 38/month; seek FAA approval to 42/month later in 2025 Raised cadence contingent on FAA
787 production rate2025Move from 5 to 7/month in 2025 Now at 7/month; stabilize before future increases Achieved increase
737‑7/‑10 certificationTimelineNot specifiedExpect certification in 2026; engine anti‑ice solution taking longer Delayed
Free cash flowQ3 2025Not specifiedQ3 FCF usage similar to Q2 before potential $700M DOJ payment; Q4 positive Clarity on intra‑year profile
FY Free cash flow2025Usage better than 2024 Around ($3B) for 2025; exit year positive momentum Quantified usage
737 deliveries2025~400 “Poised to do a little better than 400” Slightly raised
787 deliveries202570–80High end of 70–80 range Tilt to high end
777XEIS20262026 unchanged; inventory up ~$0.9B in Q2; heavy pre‑EIS cash usage Reaffirmed timetable
BDS margin targetMedium/long termReturn to high single digitsReiterated path to high single‑digit margins Maintained target

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Supply chain stability & KPIsRestart post‑IAM strike; KPIs defined for FAA approval; buffer inventories elevated 737 at 38/month, KPIs progressing; plan to request 42/month; 787 KPIs “all green”; focus on reducing rework Improving operational stability
Tariffs/macroManaging tariff and input cost pressures; portfolio pruning and capital raise in Q4 2024 Several bilateral “zero for zero” deals improving inputs (Japan), potential EU/Italy; demand uplift from trade deals More favorable backdrop
Certification & product programs777X charge and 2026 EIS reaffirmed; 787 seats/monuments issues 777X flight testing >1,400 flights; 737‑7/‑10 certification in 2026 due to engine anti‑ice solution Mixed: progress on 777X; delays on MAX variants
BDS fixed‑price program executionLarge charges; active management MOA on T‑7; KC‑46 issues Stabilizing margins; T‑7A MOA milestones and ground testing on MQ‑25; path to high single‑digit margins Gradual improvement with ongoing risk
Free cash flow profile2025 expected usage first half, positive second half Q3 usage similar to Q2; potential $700M DOJ payment; Q4 positive; FY ~($3B) Sharpened intra‑year cadence
Culture & leadershipEnterprise values reset; performance management changes; portfolio review/pruning New performance management approach to strengthen accountability; continued culture change Continuing emphasis

Management Commentary

  • “Our fundamental changes to strengthen safety and quality are producing improved results as we stabilize our operations and deliver higher quality airplanes…” — Kelly Ortberg, CEO .
  • “Core loss per share of $1.24 was a significant improvement… Free cash flow was a usage of $200 million… better than expectations… with 13 777 deliveries driving ~$700 million positive free cash flow.” — Brian West, CFO .
  • “On 737… achieved a rate of 38 airplanes per month… expect to be in a position to request approval from the FAA… to increase to 42.” — Kelly Ortberg .
  • “Work on [737‑7/‑10] solution is taking longer… now expecting certification in 2026.” — Kelly Ortberg .
  • “We were encouraged by certain bilateral trade deals… as a top U.S. exporter, free trade policy across commercial aerospace continues to be very important.” — Brian West .
  • “Zero for zero” tariff discussions (Japan, EU/Italy) could reduce input costs and support demand. — Kelly Ortberg .

Q&A Highlights

  • Free cash flow outlook: Q3 usage similar to Q2 before potential $700M DOJ payment; Q4 positive; FY ~($3B). Strong dependence on delivery momentum and trade environment .
  • Delivery and rate trajectory: 737 poised to exceed ~400 deliveries in 2025, 787 at the high end of 70–80; FAA approval needed to lift 737 above 38/month; rate increases in five-per-month steps no earlier than six months apart .
  • Certification delays: 737‑7/‑10 engine anti‑ice solution requires design changes; certification now 2026; 777X testing progressing toward 2026 EIS .
  • Defense execution: Active management and MOAs with USAF to reduce concurrency and de‑risk T‑7; BDS path back to high single‑digit margins with fixed‑price development programs targeted to neutral profit/cash longer term .
  • Tariffs/trade: Bilateral agreements improve input cost outlook and demand; caution on potential retaliatory tariffs with China and USMCA revisit .

Estimates Context

How results compared to Wall Street consensus (S&P Global):

MetricQ4 2024Q1 2025Q2 2025
Revenue Actual ($B)$15.242 $19.496 $22.749
Revenue Consensus ($B)$15.198*$19.793*$21.611*
Primary/Core EPS Actual ($)($5.90) ($0.49) ($1.24)
Primary EPS Consensus ($)($3.780)*($1.303)*($1.270)*
# of EPS Estimates12*19*18*
# of Revenue Estimates7*21*21*
  • Q2 2025: Revenue beat by ~$1.14B; EPS modest beat by ~$0.03; delivery volume and widebody mix the primary drivers *.
  • Q1 2025: EPS beat significantly vs consensus; revenue slightly missed; operational improvement and mix helped EPS *.
  • Q4 2024: Revenue in line; EPS missed due to IAM work stoppage and defense charges *.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Delivery-driven beat: Strong Q2 revenue and slightly better EPS, with widebody deliveries adding ~$700M FCF benefit; watch 777 and 787 mix for cash tailwinds .
  • Rate approvals as near-term catalyst: FAA go‑ahead above 38/month on 737 and stable 787 at 7/month underpin margin recovery and cash conversion in H2 2025 and into 2026 .
  • Certification risk persists: 737‑7/‑10 pushed to 2026; monitor design resolution on engine anti‑ice and its modest margin consequences; 777X testing on track for 2026 EIS .
  • Defense margin trajectory improving: Positive BDS margin in Q2; continued active program management (T‑7, MQ‑25) supports path to high single‑digit margins medium term .
  • Cash outlook: Expect Q3 FCF usage similar to Q2 (before potential $700M DOJ payment), Q4 positive, and FY ~($3B) usage with positive exit momentum; H2 performance is key for sentiment .
  • Tariff backdrop turning favorable: “Zero for zero” deals reduce input costs and support demand; remain vigilant on China retaliatory risk and USMCA stability .
  • Execution focus: Continued reduction of rework, KPIs for stability, and portfolio pruning signal discipline; BGS continues to provide earnings ballast at ~20% margins .

Appendix: Additional Data Points

  • Unallocated charge: $445M linked to DOJ non‑prosecution agreement impacted Q2 earnings .
  • Backlog: $618.5B total company backlog with >5,900 BCA airplanes; BCA backlog $522.2B .
  • Cash & debt: $23.0B cash/investments; $53.3B consolidated debt; $10B undrawn revolvers .