Boeing outlines $3B full-year free cash flow target following record Q2 deliveries and trade tailwinds

Earnings Call Insights: The Boeing Company (BA) Q2 2025

Management View

Robert K. Ortberg, CEO, began with an update on the company’s recovery progress, highlighting that “our recovery plan is taking hold. We’re making steady progress to stabilize our business, strengthen development program execution and change our culture to set up for the future.” He pointed to the company’s largest ever wide-body order for up to 210 commercial airplanes in May and recent defense wins such as the F-47 as contributors to the company’s upward momentum.
Ortberg emphasized operational improvements in Boeing Commercial Airplanes (BCA), noting “we’ve reduced traveled work at roll-up by 50%. We’ve addressed employee feedback from our safety and quality standdowns. We’ve employed structured on-the-job training, and we simplified more than 1,500 work instruction documents.”
On production, Ortberg said, “we delivered 150 commercial jets in the quarter and 280 in the first half of the year. That makes it the most deliveries in the second quarter and first 6 months of the year since 2018.”
The CEO reported that the 737 program achieved a rate of 38 airplanes per month and is preparing to request FAA approval to increase to 42 per month. The 787 program is now at a rate of 7 airplanes per month, with KPIs described as “all green.”
Ortberg discussed leadership updates, welcoming Steve Parker as the permanent Defense business CEO and announcing Jay Malave as the incoming CFO as Brian West transitions to a senior advisory role.
On the trade environment, Ortberg stated, “We are seeing some of these input tariffs resolve through negotiation agreements like the one announced over the weekend between the U.S. and the EU and the bilateral with the U.K. So overall, we’re probably feeling better today, but we still need to actively manage through this dynamic environment.”
CFO Brian J. West commented, “Revenue was $22.7 billion, up 35%, primarily driven by higher commercial delivery volume. The core loss per share of $1.24 was a significant improvement compared to last year, driven by higher commercial deliveries and improved operational performance across the business. Free cash flow was a usage of $200 million in the quarter, reflecting higher commercial deliveries and working capital that improved compared to both the prior year and the prior quarter.”

Outlook

West indicated, “We expect third quarter free cash flow to be more or less in line with the second quarter usage before any impact from a potential onetime DOJ payment. That sets us up for positive free cash flow in the fourth quarter so long as the global trade environment continues to remain favorable for the industry and our commercial delivery forecast remains intact.”
During the Q&A, West said, “That number you threw out there in terms of $3 billion, that’s probably a pretty good assumption” for full-year free cash flow.
Ortberg stated expectations to request FAA approval to increase 737 production to 42 per month in the coming months and confirmed the 787 program is focused on stabilizing at 7 per month with further increases planned as KPIs support.
On product certification, Ortberg said, “Work on the solution is taking longer than expected, and we now are expecting certification in 2026” for the 737-7 and -10.

Financial Results

Boeing reported Q2 revenue of $22.7 billion and a core loss per share of $1.24. Free cash flow for the quarter was a usage of $200 million. Cash and marketable securities ended at $23 billion, with debt at $53.3 billion.
BCA delivered 150 airplanes, with revenue of $10.9 billion and an operating margin of -5.1%. Commercial backlog ended at $522 billion.
BDS revenue was $6.6 billion with an operating margin of 1.7%. BDS backlog reached $74 billion.
Boeing Global Services reported revenue of $5.3 billion, operating margin of 19.9%, and a $22 billion backlog.

Q&A

Myles Alexander Walton, Wolfe Research: Asked about free cash flow assumptions and upside risks; Brian J. West responded, “I think your number there of $3 billion is pretty reasonable for the full year,” explaining drivers behind the free cash flow performance and expectations for the rest of the year.
Sheila Karin Kahyaoglu, Jefferies: Inquired about tariff agreements and order momentum; Ortberg explained that recent tariff agreements, especially with Japan, “will be helpful for us going forward” and that the “order environment is going to be very good.” He also noted the importance of avoiding retaliatory tariffs with China.
Peter J. Arment, Baird: Asked about long-term production rate increases for 737 and 787; Ortberg stated, “We have a series of rate increases in our plan” and described investments in Charleston to expand 787 capacity. On rate increases, “once we get that KPI where we need it, then we’ll be having those discussions with the FAA.”
David Egon Strauss, Barclays: Queried about delivery guidance and inventory; West stated, “on 787, we’ve delivered 37 airplanes in the first half… on the 737… we’ve delivered 209 airplanes in the first half” and expect full-year deliveries to be “a little better than the 400” for the 737 and at the high end of the range for the 787.
Ronald Jay Epstein, Bank of America: Asked about the engine anti-icing issue; Ortberg explained, “The latest delay is driven by we just haven’t closed the design… the engineering design did not… yield in the time frame that we were anticipating, and so we still have work to do.”
Additional questions addressed production ramp risks, margin progression, defense segment recovery, long-term free cash flow targets, competitive positioning for new single-aisle aircraft, and CEO priorities for 2026.

Sentiment Analysis

Analysts expressed cautious optimism, focusing on cash flow, production stability, and tariff impacts, while probing risks and execution timelines.
Management tone was slightly more confident than the previous quarter, with Ortberg stating, “we’re probably feeling better today,” and expressing clear plans for rate increases and risk mitigation, though acknowledging ongoing challenges.
Compared to Q1, both management and analysts showed increased confidence, with more positive language around operational progress and financial recovery, but analysts remained attentive to execution risks and macro uncertainties.

Quarter-over-Quarter Comparison

Guidance language in Q2 shifted to a firmer stance on achieving positive free cash flow in Q4, and management directly endorsed a $3 billion full-year free cash flow target, compared to a more conservative and flexible approach in Q1.
Strategic focus remained on production ramp and operational stability, but Q2 reflected more assertive messaging regarding tariff resolution and trade environment improvements.
Analyst focus shifted from concerns about the China delivery situation and tariff cost sizing in Q1 to deeper questions about rate increases, margin trajectories, and long-term cash flow in Q2.
Key metric changes included a jump in quarterly deliveries and revenue, improved operating margins in BDS and BGS, and a significant increase in commercial backlog.
Management confidence in recovery efforts and delivery performance was more pronounced, with explicit forward-looking targets and milestones.
Analyst tone remained engaged, but confidence in management’s ability to execute appeared to increase, reflected in more forward-looking questions about growth and profitability.

Risks and Concerns

Management highlighted the ongoing dynamic trade environment and the importance of avoiding retaliatory tariffs, especially with China, as a continued risk.
Certification delays for 737-7 and -10 were acknowledged, with Ortberg noting, “we now are expecting certification in 2026.”
Input tariff costs and supply chain continuity were cited as areas requiring active management, though recent trade deals were seen as mitigating factors.
Potential impact of a $700 million onetime DOJ payment on free cash flow was discussed.

Final Takeaway

Boeing management underscored that the company is gaining operational and financial momentum, with record Q2 commercial deliveries, a robust order pipeline, and improved stability across key programs. The leadership transition and recent trade tailwinds have strengthened confidence in meeting the full-year free cash flow target of $3 billion, while ongoing focus remains on production ramp execution, cost management, and navigating the evolving global trade landscape.

Read the full Earnings Call Transcript