Boeing (BA) reported a narrower first-quarter net loss of $7 million, compared to a $31 million loss a year earlier, as revenue climbed 14% to $22.2 billion. The aerospace giant delivered 143 commercial jets during the quarter, outpacing European rival Airbus, which handed over 114 aircraft. However, the company continued to burn cash, using $1.5 billion in free cash flow, though management reiterated its full-year target of positive free cash flow between $1 billion and $3 billion, with the second half expected to turn positive.
Execution Focus Shifts From Crisis to Production
CEO Kelly Ortberg told analysts the company is “headed in the right direction,” emphasizing safety, quality, and operational performance. CFO Jay Malave called the quarter “clean,” but acknowledged the cash burn. The commercial aircraft unit still posted a $563 million operating loss despite a 13% revenue increase to $9.2 billion. The 737 program is currently producing 42 jets per month and plans to increase to 47 this summer.
Record Backlog and Defense Strength
Boeing’s backlog reached a record $695 billion, bolstered by strong demand for commercial and defense products. Defense, Space & Security revenue jumped 21% to $7.6 billion, with a record $86 billion backlog driven by KC-46 tanker, missile, and classified programs. This positions Boeing to benefit from a global defense spending cycle, alongside peers like Lockheed Martin and RTX.
Key Risks and Certifications
Investor attention remains on execution risks: 737 output, 787 supplier delays, and aircraft certifications. Boeing expects the 737-7 and 737-10 to be certified this year, with first deliveries in 2027, while the 777X remains on track for 2027 first delivery. Delays could pressure cash flow. A 737 wiring nonconformance affecting 25 aircraft has been resolved, and management says it won’t impact delivery goals or rate increases.
On the 787, Ortberg noted seat certifications and engine delays have held back some deliveries, but he sees “no showstoppers,” though work is taking longer than expected. Geopolitical risks, including Middle East instability and higher fuel prices, could also slow deliveries, but Ortberg said no delivery impact has been seen so far.
Market Reaction and Outlook
Shares traded near $231.54 early Monday in New York, little changed after a 5% gain following the earnings release. The market is giving Boeing credit for progress, but investors want proof that higher output can be sustained. With a record backlog and improving defense performance, Boeing’s path to positive cash flow hinges on flawless execution in the second half of 2026.
