Boeing: Turbulence Is Minimal Even If China Stops Buying Planes

Core Viewpoint - Boeing is showing signs of recovery and improvement in its fundamentals, positioning itself to regain market share against Airbus despite challenges such as trade wars and delivery rejections from China [1][2]. Financial Performance - In Q1 2025, Boeing reported a non-GAAP EPS loss of 49 cents, exceeding consensus estimates by 67 cents, and showing significant improvement from a $1.13 loss in the same period last year [4]. - Revenues increased by 17.7% year-on-year to $19.50 billion, slightly below the consensus estimate of $19.54 billion [4]. - Operating margin improved to 2.4%, up from 0.5% [5]. Segment Performance - The Commercial Airplanes segment saw a 75% year-on-year revenue growth to $8.15 billion, with 130 airplanes delivered during the quarter, up from 83 last year [5][8]. - The Defense, Space & Security segment experienced a 9% revenue decline to $6.3 billion, but operating margins improved to 2.50% from 2.20% [6]. Backlog and Orders - The backlog for the Commercial Airplanes segment exceeds 5,600 airplanes, valued at nearly half a trillion dollars, with 221 net orders booked during the quarter [8]. - The segment backlog stands at $62 billion, with 29% attributed to international customers [7]. Production Plans - Boeing aims to increase its 737 MAX production cap from 38 to 42 per month, with plans to further raise it to 52 in increments every six months [10]. Strategic Moves - Boeing plans to sell parts of its Digital Aviation Solutions business for $10.55 billion to focus on its core operations, closing the quarter with $23.7 billion in cash and marketable securities [11]. Market Outlook - Analysts have a 12-month stock price forecast for Boeing at $198.45, indicating a potential upside of 12.58% from the current price of $176.27 [12].