Boeing reported a larger-than-expected second-quarter loss of $428 million, driven by a $280 million charge on its delayed Air Force One replacement program. Despite the setback, the company generated positive free cash flow of $631 million, signaling progress in its turnaround efforts under CEO Kelly Ortberg.
Core Developments
Boeing's Defense, Space & Security segment swung to a $15 million operating loss from a $110 million profit a year earlier due to the Air Force One (VC-25B) program. The company maintains its 2028 delivery target for the two presidential aircraft, despite the $3.9 billion fixed-price contract being over budget and behind schedule.
Financial and Operational Highlights
Revenue rose 8% year-over-year to $24.56 billion, exceeding estimates. Adjusted earnings per share (EPS) came in at a loss of 76 cents, wider than the expected 30-cent loss. Free cash flow improved significantly from a negative $200 million in Q2 2025 to $631 million, driven by higher commercial aircraft deliveries and favorable working capital timing.
Program and Production Updates
Boeing delivered 171 commercial aircraft in Q2, up from 150 a year ago, with the 737 Max accounting for 129 of those deliveries. The company is ramping up 737 Max production to 47 planes per month, with further increases planned. Additionally, Boeing increased capital investments to expand 787 production in South Carolina and military jet production in St. Louis.
CEO and Market Reaction
CEO Kelly Ortberg emphasized the importance of schedule performance and safety in a memo to employees, stating that the company is investing to meet its 2028 delivery commitment. Shares rose over 4% following the earnings report, reflecting investor confidence in the turnaround progress despite the Air Force One setback.
Geopolitical and Industry Context
The Iran war and subsequent oil price volatility have impacted Boeing and its aerospace peers, raising concerns about airline flight cuts and order delays. However, Ortberg noted that Middle East-based carriers have not delayed orders. The company's stock remains about 16% below its 2026 high, reflecting ongoing market uncertainty.