The shares of aerospace giant Boeing (BA.US) are gaining nearly 3% before the opening of today's cash session on Wall Street. The reason for the gains is the Q1 earnings report, which performed better than investors had feared. The technical problems seen so far with the 737 Max aircraft are being addressed by the company, which is complying with FAA audit recommendations.
The company is slowing down business, but it is doing so intentionally. As reported by the company's CEO, the priority now is to produce aircraft in smaller numbers (38 Maxes per month), but to ensure the highest possible safety and control standards.
Selected company results:
- Revenue $16.57 billion, ($16.25 billion expected)
- Adjusted EPS loss of $1.13 (expected loss of $1.72)
- Commercial aircraft revenue $4.65 billion, (expected $5.45 billion)
- Defense, space and security revenue $6.95 billion, (expected $6.38 billion)
- Global services revenue $5.05 billion, (expected $4.98 billion)
- Negative free cash flow $3.93 billion, (expected negative $4.4 billion)
- Negative cash flow from operating activities $3.36 billion, (negative $2.77 billion expected)
- Basic loss per share $1.13
- Backlog $529 billion
- Defense, space security operating profit $151 million, (expected $62.7 million)
- Global services operating profit $916 million, (expected $824.7 million)
Other key information:
- 737 program slowed production below 38 units per month
- Backlog at end of quarter rose to $529 billion
- Results reflect lower deliveries of 737 aircraft and the grounding of the 737 max 9 version
- Boeing assured that it is making intensive efforts to strengthen the quality and safety of its aircraft (a reference to the numerous defects and failures we have witnessed since the beginning of the year)
- The commercial flight division is implementing the FAA agency's audit turnaround procedures against the production of 737 aircraft
The company's current valuation before the opening of the cash session on Wall Street. Source: xStation
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