As one of the iconic industrial giants, aerospace and defense juggernaut Boeing Co (NYSE:BA) represents an important cog in the U.S. and global economic machinery. For the most part, management's efforts to right the ship appear to have resonated with investors, leading to BA stock rising over 24% on a year-to-date basis. For comparison, the benchmark S&P 500 has gained under 15% during the same frame.Fundamentally, much hinges on the overall certification and eventual delivery of Boeing's 777-9 aircraft. R ...

A lot is riding on Boeing's new 777X, the world's largest passenger plane in production. But it has been delayed — again. On Thursday, Bloomberg reported that the revolutionary jetliner, featuring folding wingtips and increased fuel economy compared to competitors, is now targeting a 2027 entry to service. That's seven years later than its original 2020 timeline.The outlet said German flag carrier and launch customer Lufthansa was removing the 777X from its 2026 fleet plan to account for the new delay, cit ...

Boeing’s 777X is slated to fly commercially for the first time in early 2027 instead of next year https://t.co/XDbQvr497o ...

Group 1 - RBC Capital Markets reiterated its Outperform rating and $250 price target on Boeing, citing progress on regulatory approvals for key aircraft programs [1] - The Federal Aviation Administration has permitted Boeing to resume issuing airworthiness certificates for the 737 MAX and 787 models, which is seen as a positive signal for investor confidence [1] - Although production ramp-up to 42 per month for the MAX has not yet been authorized, the update is viewed positively by RBC [1] Group 2 - RBC adjusted its model to account for an anticipated charge on the 777X program and its impact on free cash flow in 2026–2027 [2] - Despite the adjustments, Boeing's fundamentals are considered strong, justifying the Outperform rating and $250 price target [2]

Core Viewpoint - Boeing's stock has declined nearly 5% in the last month due to ongoing certification delays, cash flow pressures, and a costly defense labor strike, raising concerns about revenue and margin pressures [2][4][6] Financial Performance - Boeing reported $67 billion in revenue for 2024 but faced a negative free cash flow of approximately $14 billion, with optimistic projections for 2025 suggesting free cash flow will only reach $5-6 billion [4][9] - The company's current valuation is around $220, equating to an equity value of approximately $166 billion, but could potentially drop by 50% if fundamentals do not improve [4] Risks and Challenges - Regulatory and certification delays for the 777-9 and other wide-body programs are costly in terms of time and capital [5] - Rising production and quality costs, including safety and quality reworks, are expected to escalate margin pressures [5][9] - Demand risks from macroeconomic slowdowns, airline bankruptcies, and geopolitical issues could hinder order momentum [9] Market Sentiment - A bearish scenario could see Boeing's stock price drop to the $100-$110 range if losses persist and cash flow remains negative [7] - The market is currently trading on a narrative of hope regarding delivery increases and cost management, but risks remain tangible [6][7] Operational Insights - Boeing improved deliveries in Q2, with 150 deliveries compared to 92 year-over-year, indicating scaling operations [9] - A robust backlog of approximately $520-600+ billion offers visibility into potential future revenues [9]

Summary of The Boeing Company Conference Call Company Overview - The discussion revolves around The Boeing Company, a major player in the aerospace and defense industry, with insights from CEO Kelly Ortberg. Key Points Leadership and Culture - Kelly Ortberg has been CEO for over a year, facing challenges such as macro dynamics, equity raises, and tariff environments [4][5] - Focus on improving company culture by enhancing leadership visibility and changing incentive programs to foster collaboration [5][6] - Implementation of a new performance management system to align employee behavior with company values [6][7] - Positive feedback from customers, indicating a cultural shift within the organization [6][7] Demand and Pricing Environment - Boeing benefits from U.S. trade agreements, with significant aircraft orders from airlines like Qatar Airways and British Airways [10][11] - Demand remains strong, but pricing is influenced by supply constraints and inflationary pressures in the supply chain [11][12] Production and Delivery Updates - Production of the 737 MAX has stabilized at 38 units per month, with plans to increase to 42 units pending FAA approval [13][14] - Inventory levels are high, which will help buffer against supply chain challenges during rate increases [17][18] - Future production increases are planned, with a target of 47 units per month as supply chain aligns [18][19] Aircraft Certification Progress - Certification for the 737 MAX 10 and 737 MAX 7 is ongoing, with a focus on engine design [21][22] - The 787 program is set to increase production from 7 to 8 units, with a goal of reaching 10 units next year [23][24] - The 777X program faces certification delays, but demand remains strong [30][34] Defense Sector Developments - Leadership changes in Boeing Defense, with a focus on stabilizing operations and improving margins [35][36] - Tentative agreements reached with union leadership to mitigate impacts from strikes [39][40] Financial Outlook - Free cash flow for 2025 is projected to be negative $3 billion, with expectations of improved cash flow in 2026 [41][42] - The company aims to prioritize debt reduction and maintain investment-grade status [53] Portfolio Management - Ongoing evaluation of the portfolio, with potential for further divestitures to focus on core business [52] - Emphasis on managing risks in fixed-price contracts to improve profitability [36] Future Focus - The CEO plans to shift focus towards development and certification processes to enhance efficiency [57] - Excitement about upcoming rate increases and achieving parity with competitors like Airbus [59] Additional Insights - The company is committed to maintaining high-quality production while ramping up delivery rates [20][50] - The cultural transformation is seen as a multi-year process, with ongoing efforts to align the organization towards common goals [7][55]

Core Viewpoint - Boeing's certification for the 737 Max 7 and Max 10 has been delayed to 2026, impacting the company's turnaround efforts under CEO Kelly Ortberg [1][2]. Group 1: Certification Delays - The certification for the Max 7 and Max 10 was initially expected in 2022 but has now been pushed to 2026 due to complications with the engine anti-ice system [1][2]. - The Federal Aviation Administration (FAA) had previously warned about potential overheating issues with the engine, leading Boeing to withdraw a request for an exemption [3]. Group 2: Design and Engineering Challenges - Boeing is exploring different design paths to address the de-icing requirements, as the initial engineering designs did not meet the anticipated timeline [4][8]. - The company has acknowledged issues with the design implementation, necessitating additional design changes [8]. Group 3: Financial Performance - Boeing reported quarterly revenues of $22.7 billion, exceeding expectations, but also recorded a net loss of $612 million [9]. - The company's share price fell approximately 4% following the announcement but remains over 30% higher since the beginning of the year [11]. Group 4: Other Aircraft Developments - Boeing is also working on the certification of the 777X, which is now expected to enter service in 2026, with ongoing flight testing showing no new technical issues [9].

Financial Performance - The company reported revenue of $22.7 billion, a 35% increase primarily driven by higher commercial delivery volume [28] - Core loss per share improved to $1.24 compared to the previous year, attributed to higher commercial deliveries and improved operational performance [28] - Free cash flow usage was $200 million in the quarter, reflecting better performance than expectations [28] Business Segment Performance Boeing Commercial Airplanes (BCA) - BCA delivered 150 airplanes in the quarter, with revenue of $10.9 billion and an operating margin of -5.1% [29] - The backlog increased to $522 billion, up more than $60 billion sequentially, including over 5,900 airplanes [30] - The 737 program delivered 104 airplanes, with production ramping up to 38 per month [30][31] Boeing Defense, Space & Security (BDS) - BDS booked $19 billion in orders, with revenue of $6.6 billion, up 10% [35] - Operating margin improved to 1.7%, reflecting better operational performance [35] - The demand for defense products remains strong due to the global threat environment [37] Boeing Global Services (BGS) - BGS reported revenue of $5.3 billion, an 8% increase year-over-year [38] - Operating margin was 19.9%, up 210 basis points compared to last year [38] - The business received $5 billion in orders, with a backlog of $22 billion [38] Market and Strategic Insights - The company is focused on stabilizing production and improving program execution as part of its recovery plan [7][23] - Recent trade agreements are expected to positively impact Boeing's order momentum and pricing strategies [51][56] - The company is monitoring supply chain dynamics closely, with 80% of commercial supply chain spending going to U.S. suppliers [20][21] Management Commentary - Management expressed optimism about the recovery plan's progress and the strong market demand across business segments [7][8] - The company is preparing for potential rate increases in production, with a focus on maintaining stability and quality [12][63] - Management acknowledged the challenges in the operating environment but remains confident in the company's long-term prospects [41][42] Other Important Information - The company is transitioning to a new CFO, Jay Malavi, as Brian West moves to a senior advisory role [26] - The company is committed to managing its balance sheet prudently, with a focus on maintaining an investment-grade rating [40] Q&A Session Summary Question: Free cash flow performance - Management indicated that a free cash flow target of around $3 billion for the year is reasonable, with expectations for positive cash flow in the fourth quarter [45][48] Question: Tariff impacts and order momentum - Management discussed the positive effects of recent trade agreements on order momentum and pricing strategies, particularly regarding input tariffs [51][56] Question: Delivery guidance for MAX and 777 - Management confirmed that deliveries for the 737 MAX are tracking ahead of the 400 target for the year, with expectations for continued strong performance [72] Question: Engine anti-icing issue - Management explained that delays in the engine anti-icing solution for the 737 MAX are due to design challenges that require additional work [76][77] Question: BDS margin improvement - Management expressed confidence in returning BDS to mid to high single-digit margins, emphasizing the importance of entering appropriate contract types [96][98]

Financial Performance - Revenue for the quarter was $22.7 billion, up 35% primarily driven by higher commercial delivery volume [24] - Core loss per share improved to $1.24 compared to the previous year, reflecting higher commercial deliveries and improved operational performance [24] - Free cash flow usage was $200 million in the quarter, better than expectations, driven by higher commercial delivery volume and improved working capital [24][25] Business Segment Performance Boeing Commercial Airplanes (BCA) - BCA delivered 150 airplanes in the quarter, with revenue of $10.9 billion and an operating margin of -5.1% [25] - BCA booked 455 net orders in the quarter, with a backlog of $522 billion, up more than $60 billion sequentially [26] - The 737 program delivered 104 airplanes in Q2, with production steadily increasing to 38 per month [27] Boeing Defense, Space & Security (BDS) - BDS booked $19 billion in orders during the quarter, with revenue of $6.6 billion, up 10% [31] - Operating margin improved to 1.7%, reflecting better operational performance [31] - BDS delivered 34 aircraft and two satellites in the quarter, with a focus on stabilizing production and improving margins [31][32] Boeing Global Services (BGS) - BGS revenue was $5.3 billion, up 8% year-over-year, with an operating margin of 19.9% [33] - BGS received $5 billion in orders, ending the quarter with a backlog of $22 billion [33] Market and Strategic Insights - The company is seeing strong market demand and is focused on stabilizing production and executing planned increases [5][6] - Recent trade agreements are expected to positively impact Boeing's order momentum and pricing strategies [50][54] - The company is committed to a culture change aimed at improving accountability and performance [20][21] Management Commentary - Management expressed optimism about the recovery plan's progress and the stability of operations, while acknowledging the work still ahead [5][6] - The company is focused on maintaining a strong supply chain and managing input costs amid a dynamic trade environment [17][18] - Future cash flow expectations are positive, with a target of achieving positive free cash flow in Q4 [38][46] Q&A Session Summary Question: Free cash flow performance and guidance - Management indicated that a free cash flow target of around $3 billion for the year is reasonable, with Q3 expected to resemble Q2 usage [42][46] Question: Impact of tariffs and trade agreements - Management discussed the positive effects of recent trade agreements on input tariffs and order momentum, emphasizing the importance of maintaining favorable trade conditions [49][54] Question: Long-term delivery guidance and inventory management - Management confirmed that they are tracking ahead of delivery targets for the MAX program and are managing inventory levels effectively [70][71] Question: Engine anti-icing issue with 737 models - Management explained that delays in the engine anti-icing design are due to ongoing testing and design adjustments [74][75] Question: Future rate increases and production capacity - Management expressed confidence in achieving planned rate increases, supported by inventory levels and production stability [80][81] Question: BDS margin improvement and strike risks - Management reassured that the potential impact of strikes on BDS operations is manageable and that they are focused on returning to high single-digit margins [94][95]

Core Viewpoint - Boeing reported a total of 303 aircraft orders in May, indicating strong demand across its product lines [1] Summary by Category Total Orders - The total number of orders for Boeing in May was 303 aircraft [1] Specific Aircraft Orders - Among the total orders, there were 127 orders for the 787 series [1] - Boeing received 30 orders for the 777X model [1] - The 737 MAX model accounted for 146 orders [1]