DELIVERY VOLUME RETURNS TO PRE-GROUNDING LEVELS

 

Boeing delivered 171 commercial aircraft in the three months to 30 June, against 150 in the same quarter of 2025 — an increase of 14% and, as widely reported in coverage of the results, the company’s highest quarterly delivery total since 2018. The 737 accounted for the majority of the gain at 129 units against 104 a year earlier, with 787 deliveries rising to 25 from 24 and 767 deliveries to 10 from 9. The 777 declined to 7 from 13 as that programme transitions towards the 777X.

For the first half, deliveries totalled 314 against 280 in the comparable period. Commercial Airplanes revenue rose 8% in the quarter to $11,751 million, which Boeing attributes to higher deliveries, favourable mix, improved performance and other adjustments. The segment recorded a loss from operations of $322 million at a margin of negative 2.7%, narrowing from a $557 million loss and a negative 5.1% margin a year earlier.

737 RATE TRANSITION AND THE FOURTH EVERETT LINE

 

Boeing stated that the 737 programme began transitioning production to a 47-per-month rate during the quarter, and that low-rate initial production was activated on the 737 North Line in July. The North Line is the fourth 737 final assembly line and is located at the Everett factory in Washington, initially focused on the 737 MAX 10 variant. Its activation adds physical assembly capacity to a programme where output has been the binding constraint on Boeing’s delivery performance since 2019.

Speaking to analysts following the results, Chief Executive Kelly Ortberg said he did not anticipate supply chain difficulties in taking MAX production from its current level to 52 per month, while indicating that the subsequent steps towards 57 per month and beyond would prove progressively more demanding and would depend on performance across the supplier base. He stated that the company was operating to its plan. Ortberg also confirmed that Boeing is working towards an increase in 787 production from the current eight per month to ten, and noted that FAA certification of new seat designs has delayed some deliveries — a constraint that arises at supplier level rather than in Boeing’s own assembly process.

CERTIFICATION STATUS ACROSS THREE PROGRAMMES

 

Boeing reported that, as of July, certification flight testing has been completed on both the 737-7 and the 737-10. The company stated that it continues to anticipate certification of both variants in 2026 and first delivery in 2027. Separately, the 777X programme received FAA approval during the quarter to begin certification flight testing under Type Inspection Authorization 4B, with Boeing stating that it continues to anticipate first delivery in 2027.

Note: certification and delivery timings in this section are Boeing’s stated expectations as published in its second quarter results release, and are subject to the forward-looking statements caveat contained in that release. Certification dates are determined by the Federal Aviation Administration.

 

The three programmes carry substantial order backlogs among operators awaiting delivery. Type Inspection Authorization is the point at which FAA personnel begin participating directly in certification flight testing, and represents a defined procedural stage rather than an assurance of timing. For operators holding orders on the 737-7, 737-10 and 777X, the completion of 737 certification flight testing and the commencement of 777X certification flight testing are the most operationally significant developments reported in the quarter.

ORDERS AND BACKLOG

 

Commercial Airplanes booked 246 net orders during the quarter, including orders from Korean Air, Delta Air Lines and SMBC Capital. The segment closed the period with a backlog of more than 6,200 aircraft valued at $596,724 million, up from $567,290 million at the end of December. Total company backlog stood at $715,261 million against $682,207 million at year end, with Defense, Space & Security contributing $85,322 million — of which 27% represents orders from customers outside the United States — and Global Services $32,840 million.

DEFENCE AND SPACE: MQ-25A FIRST FLIGHT, T-7A PRODUCTION, AND A FURTHER VC-25B CHARGE

 

Defense, Space & Security recorded revenue of $7,483 million, up 13% on higher volume, and a loss from operations of $15 million at a margin of negative 0.2%, against earnings of $110 million and a 1.7% margin a year earlier. The reversal is attributed to $280 million of losses on the VC-25B programme, which Boeing states were driven primarily by an investment in additional production and certification resources.

The VC-25B contract, signed in 2018, covers the modification and outfitting of two 747-8 aircraft for presidential use under a fixed-price arrangement originally valued at approximately $3.9 billion, with an initial delivery target of December 2024.

Boeing stated in its results release that it continues to anticipate first delivery in 2028; the second aircraft has been reported as scheduled for 2029. Accumulated losses on the programme have been reported as exceeding $2.8 billion.

 Under a fixed-price development contract the contractor absorbs cost growth rather than recovering it from the customer, and Boeing lists reliance on fixed-price contracts among the risk factors published with its results.

Operationally, the segment recorded three notable programme events in the quarter. It completed first flight of the US Navy MQ-25A Stingray and received Milestone C on the programme, marking the transition point at which a US defence programme is approved to enter production. It began low-rate initial production of the US Air Force T-7A Red Hawk trainer. It also secured an award from the US Space Force covering proprietary communications capabilities.

GLOBAL SERVICES

 

Global Services recorded revenue of $5,344 million, up 1% on higher volume, with earnings from operations of $968 million at a margin of 18.1% — down from $1,049 million and 19.9% a year earlier. Boeing attributes the margin movement to the impact of the Digital Aviation Solutions divestiture, higher costs and unfavourable mix. During the quarter the segment secured a US Navy award to provide training systems for the P-8A, and announced an agreement with Alaska Airlines to integrate the Boeing Virtual Airplane training solution.

FINANCIAL RESULTS AND MARKET RESPONSE

 

Group revenue for the quarter was $24,560 million, up 8% on $22,749 million a year earlier. Boeing recorded GAAP earnings from operations of $156 million at an operating margin of 0.6%, against a $176 million loss and a negative 0.8% margin in the comparable quarter. On the non-GAAP core basis, which excludes the FAS/CAS pension and postretirement service cost adjustment, core operating earnings were $1 million at a 0.0% margin against a $433 million core operating loss a year earlier. The net loss was $428 million, narrowing from $612 million, producing a GAAP diluted loss per share of $0.67 and a core loss per share of $0.76.

Measured against analyst expectations, the quarter produced a mixed result. The core loss of $0.76 per share compared with a consensus of approximately $0.30 per share according to LSEG data reported in the financial press, while revenue exceeded a consensus of around $24.25 billion. Free cash flow of $631 million compared with expectations of a cash outflow of approximately $177 million. Boeing shares rose approximately 4.9% in midday trading following the release. The company stated that it is maintaining full-year free cash flow guidance of $1 billion to $3 billion.

Operating cash flow was $1,364 million in the quarter against $227 million a year earlier, which Boeing attributes to higher commercial deliveries and working capital timing, noting that customer payments ran higher than anticipated. For the first half, operating cash flow was $1,185 million against an outflow of $1,389 million, with free cash flow of negative $823 million after capital expenditure of $2,008 million — the latter reflecting increased investment at the Charleston site supporting 787 production and at St. Louis supporting military aircraft production. Consolidated debt fell to $45.9 billion from $47.2 billion at the end of the first quarter, following first-half debt repayments of $8,376 million. Cash and investments in marketable securities totalled $20.0 billion, and the company retains $10.0 billion of undrawn credit facilities.

SEGMENT COMPOSITION OF THE QUARTER

 

Boeing’s published segment table shows the three reporting segments producing combined operating earnings of $631 million in the quarter, against $602 million a year earlier — a difference of $29 million. Over the same period the consolidated core operating result moved from a loss of $433 million to earnings of $1 million, a difference of $434 million. The balance is accounted for by unallocated items, eliminations and other, which fell from a charge of $1,035 million to $630 million, a movement Boeing attributes primarily to the timing of allocations.

At segment level the movements ran in opposite directions. Commercial Airplanes narrowed its loss by $235 million, Defense, Space & Security moved from a $110 million profit to a $15 million loss, and Global Services earnings fell by $81 million. The industrial reading is that the improvement in Boeing’s commercial manufacturing performance during the quarter was accompanied by deterioration in its defence segment and margin compression in services.