As aircraft deliveries climbed to their highest level since 2018, Boeing Company achieved positive free cash flow for the second consecutive quarter, with revenue surging year-over-year and adjusted earnings per share reaching a new single-quarter high in over a decade. Losses narrowed in core divisions like Commercial Airplanes, indicating the company is gradually emerging from the shadow of years of operational and quality crises.
On Tuesday evening, Boeing released its fourth-quarter earnings report, with the following key highlights:
Financial Performance: Fourth-quarter revenue reached $23.95 billion, a 57% increase year-over-year; free cash flow was $375 million, turning positive for the second straight quarter; full-year revenue of $89.46 billion and 600 deliveries both marked the highest figures since 2018. Profit Structure: The GAAP earnings per share of $10.23 for the fourth quarter was primarily driven by a $9.6 billion one-time gain from the sale of the Digital Aviation Solutions subsidiary; excluding this gain, the actual loss per share exceeded analyst expectations. Production Recovery: The company delivered 160 aircraft in the fourth quarter, a 181% increase year-over-year; 737 production capacity increased to 42 per month, while the 787 reached 8 per month, with a focus on stabilizing this rate. Order Backlog: The total order backlog surged to a record $682 billion, with commercial airplane orders exceeding 6,100 aircraft valued at $567 billion; customer efforts to improve relations with the White House through aircraft purchases became a significant driver of the order surge. Business Integration: The acquisition of Spirit AeroSystems was completed in December, strengthening supply chain control; the Defense department's operating loss narrowed from $2.267 billion to $507 million, although the KC-46 program still recorded an additional $600 million loss. Certification Progress: The 737-10 received FAA approval to enter the final certification flight test phase; the 777-9 entered TIA 3 certification testing, with first delivery expected in 2027. Future Focus: The Commercial Airplanes division remains unprofitable (Q4 loss of $632 million); certification delays persist for three commercial models; the company faces contract renewal negotiations in October with 16,000 Seattle-based engineers.
Boeing's stock erased its earlier gains in pre-market trading and was down 1.5%.
The "Impressive" Performance Propped Up by Asset Sales
Boeing's fourth-quarter report presented a superficially strong report card, but investors need to look beyond the numbers to see the true operational picture. The quarterly revenue of $23.95 billion, a sharp 57% year-over-year increase, was mainly fueled by a significant rise in aircraft deliveries—160 aircraft delivered in Q4, nearly triple the 57 delivered in the same period last year. For the full year, the 600 deliveries and $89.46 billion in revenue indeed set the highest records since 2018, representing a sign of阶段性 recovery for a company just emerging from a half-decade of quality and operational crises. However, the GAAP EPS of $10.23 concealed a massive distortion—the $9.6 billion gain from the sale of the Jeppesen digital aviation subsidiary, equivalent to a contribution of $11.83 per share. Excluding this one-time gain, Boeing's actual loss per share was worse than the 46-cent loss analysts had anticipated. CEO Kelly Ortberg cautiously stated in a letter to employees that "we have made good progress," but simultaneously emphasized that "with progress comes expectation, and customers and stakeholders will expect more from us this year"—clearly setting the stage for continued operational pressures.
Improved Cash Flow but Commercial Airplanes Still Bleeding
The $375 million in free cash flow was one of the few bright spots. This marks Boeing's second consecutive quarter of positive cash flow, with operating cash flow of $1.31 billion primarily reflecting higher commercial airplane deliveries and timing differences in working capital. Combined with the $10.6 billion in cash from the sale of Digital Aviation Solutions, Boeing's cash and marketable securities reached $29.4 billion at quarter-end, a significant increase from $23 billion at the start of the quarter. But this cannot掩盖 the continued weakness in the core business. The Commercial Airplanes division still posted a loss of $632 million in the fourth quarter, although its operating margin improved from -43.9% a year ago to -5.6%. For the full year, the division lost $7.079 billion. While this unit contributed $11.38 billion in quarterly revenue (a 139% increase), it remained unprofitable, reflecting cost pressures during the production ramp-up and impacts from the Spirit AeroSystems integration. Although the 737 program increased its production rate to 42 per month and received FAA approval for the final certification flight tests for the 737-10, it clearly still has a distance to travel before achieving profitability. The 787 program is transitioning towards a rate of 8 per month, with the company explicitly stating it is "focused on stabilizing at that rate"—a cautious formulation hinting that the ramp-up is not proceeding entirely smoothly. The 777X program entered the TIA 3 phase of certification flight testing for the 777-9, with the first delivery date still set for 2027, years after the project's original timeline.
Defense Division Stemming Losses but KC-46 Remains a Drag
The performance of the Defense, Space & Security division was relatively more reassuring. The division reported a Q4 operating loss of $507 million. While still negative, this was a significant improvement from the $2.267 billion loss recorded a year ago. Quarterly revenue of $7.42 billion increased 37% year-over-year, reflecting more stable operational performance and higher business volume. However, the KC-46 tanker program recorded another $600 million in additional losses, primarily due to higher estimated production support and supply chain costs. This fixed-price contract continues to be a long-term financial drain for Boeing. Ironically, during the quarter, Boeing also secured a new order from the U.S. Air Force for 15 additional KC-46s, as well as a contract for 96 AH-64E Apache helicopters for the U.S. Army. The defense division's order backlog grew to a record $85 billion, with 26% coming from customers outside the United States. The Global Services division reported Q4 revenue of $5.21 billion with an operating margin of a staggering 202.4%—entirely due to the inclusion of the $9.6 billion gain from the asset sale. Excluding this factor, the division's actual performance was steady, with a record $28 billion in full-year orders and a $30 billion order backlog demonstrating the resilience of the after-sales service market.
Commercial Airplanes Underpin Record Order Backlog
The record $682 billion order backlog is undoubtedly the most eye-catching figure in this earnings report, with the Commercial Airplanes division accounting for $567 billion of that total. Boeing secured net orders for 336 aircraft in the fourth quarter, including 105 737-10s and five 787-9s from Alaska Airlines, and 65 777-9s from Emirates. For the full year, the commercial division recorded 1,173 net orders. However, one detail is particularly intriguing: customers purchasing aircraft to improve relations with the White House and President Trump. This suggests that some orders may be driven by political considerations rather than purely commercial demand. Given that Boeing's and Airbus's delivery volumes remain 20%-30% below peak levels from a decade ago, and supply chain and labor shortage issues are not fully resolved, uncertainty remains about when this backlog will translate into actual revenue and profit. Analysts at Agency Partners commented in a January 26th report: "Rates are rising, but not ahead of expectations, although by historical standards, meeting expectations is itself a major achievement." This cautious optimism perhaps best represents the market's true view of Boeing's current state.
Integration Challenges and Labor Risks
The completion of the Spirit AeroSystems acquisition in December is a core part of CEO Ortberg's strategy to reintegrate the former major subcontractor and strengthen control over safety, quality, and production stability. However, integrating a large supplier is never easy, and the commercial division's performance this quarter "also included impacts associated with the Spirit acquisition." More pressing is the potential for labor conflict. Contracts with the union representing 16,000 engineers and technical workers in the Seattle area expire in October. Ortberg must navigate the challenge of increasing production rates while avoiding labor disputes—a historically tricky balancing act for Boeing. Certification delays for three commercial airplane models remain unresolved. While the 737-10's entry into final certification testing is progress, the description "extensive delays" indicates the complexity of these programs exceeds initial expectations.
The Road to Recovery Remains Long
Boeing is indeed recovering, as evidenced by two consecutive quarters of positive cash flow, a record order backlog, and significantly increased delivery volumes. However, true profitability has not yet returned—excluding the asset sale gain, the company's core business remains in the red. Ortberg stated in the earnings release: "We have made significant progress in our recovery in 2025 and have laid the groundwork for maintaining momentum in the year ahead." The CEO, who took over last year, has defined 2026 as a "pivotal year." Based on current data, Boeing is moving in the right direction, but the pace is not fast, and numerous obstacles remain—from the ongoing losses in Commercial Airplanes, to the cost overruns of the KC-46, to the impending labor negotiations. For investors, it is crucial to distinguish between the improvement in the balance sheet (benefiting from asset sales) and the genuine recovery in operational performance. Boeing's story remains a multi-year transformation narrative, not a short-term trading opportunity judged by a single quarter. The $29.4 billion in cash and a $10 billion untapped credit facility provide ample financial cushion, but the real test for Ortberg is whether he can achieve stable profitability for the Commercial Airplanes division by 2026 and prove that the $682 billion order backlog can be converted into sustainable cash flow.