Boeing (BA.US) generated positive cash flow for the second consecutive quarter and reported a significant sales increase for the final three months of 2025, as the American aircraft manufacturer continues its recovery and benefits from a surge in orders. Fourth-quarter free cash flow reached $3.75 billion, surpassing analyst expectations, while revenue climbed 56.8% year-over-year to $239.5 billion, also beating forecasts. In a letter to employees on Tuesday, Boeing CEO Kelly Ortberg stated, "We have made good progress, and there is much reason for optimism as we begin the new year. At the same time, with progress comes expectations, and our customers and stakeholders have higher expectations for us this year." Under Ortberg's leadership, Boeing is recovering from a five-year operational and quality crisis. The company is increasing production rates for the 737 and 787 Dreamliner programs and nearly tripled its aircraft deliveries in the last quarter of the year. Boeing's total backlog has soared to a record $682 billion, as customers purchased aircraft to enhance their relationships with the White House and President Trump. The Arlington, Virginia-based manufacturer reported fourth-quarter adjusted earnings per share of $9.92, exceeding expectations and marking the highest quarterly level in over a decade. The profit surge was primarily driven by a $96 billion gain from the sale of its digital aviation subsidiary, Jeppesen, last year. Boeing stated that the acquisition of Digital Aviation Solutions, completed in November, added $11.83 per share to the quarter's earnings. However, data showed that excluding this gain, Boeing's per-share loss was more severe than the $0.46 per-share loss analysts had predicted. During the fourth quarter, the 737 program's monthly production rate increased to 42 aircraft, while the 787 program's rate rose to 8 aircraft. Boeing stated it "remains committed to stabilizing at these production levels." In Q4, Boeing recorded net orders for 336 aircraft and delivered 160; its backlog now exceeds 6,100 aircraft, with a total value of over $500 billion. Boeing delivered 600 aircraft to customers last year, nearly double the 2024 delivery figure and the highest annual total since 2018. Deliveries are critical for aircraft manufacturers, as customers pay the majority of an aircraft's price upon receipt. According to Street Account, the company's commercial airplane revenue exceeded Wall Street expectations, reaching $113.8 billion compared to the anticipated $107.2 billion. This figure represents a nearly 140% increase from the same period last year. Revenue from its defense segment grew 37% year-over-year to $74.2 billion. Last year, Boeing's rival Airbus still delivered more aircraft, totaling 793, although this figure was below the European manufacturer's record 863 deliveries in 2019. However, Boeing surpassed Airbus in net orders for 2025, securing 1,173 compared to its European competitor's 889 net orders for the year. Airlines are looking ahead to the 2030s, locking in delivery slots as they plan for growth and seek to replace older, less fuel-efficient aircraft. In recent weeks, Boeing announced Alaska Air and Delta Air Lines as customers for aircraft deliveries over the next decade. Nevertheless, Boeing is far from being out of the woods. Investors are eager to understand management's most realistic delivery pace for the current year. The manufacturer still requires approval from the Federal Aviation Administration (FAA) to increase the monthly production rate of its Max models beyond 42 aircraft. The FAA imposed this requirement following a near-catastrophic mid-air panel blowout incident in January 2024. This year is crucial for Ortberg's efforts to transform Boeing into a stable performer, but the earnings report indicates that significant work remains. Although the operating loss for the Defense, Space & Security segment narrowed to $5.07 billion from $2.27 billion a year earlier, the segment's KC-46 tanker program again experienced cost overruns. Boeing faces other challenges, such as the need to certify three commercial jet models after experiencing lengthy delays. Investors are seeking a clearer timeline for the certification of the 737 Max 7 and Max 10, as well as the 777X, which will become the largest wide-body aircraft in Boeing's product line. They also want updates on Boeing's defense business, where delayed projects include two 747 aircraft destined to serve as the next-generation Air Force One. Furthermore, the company is working to integrate its former major subcontractor, Spirit AeroSystems Holdings Inc., which it acquired late last year. Ortberg may also face more labor disputes in October, when the union contract representing 16,000 engineers and technical workers in the Seattle area expires. As aircraft manufacturers and their suppliers continue to recover from post-pandemic parts and labor shortages, jet deliveries from both Boeing and Airbus remain 20% to 30% below the peaks seen in the late 2010s. "While production is rising, it is not exceeding expectations, though by historical standards, meeting expectations is a major achievement," Agency Partners analysts Nick Cunningham and Sash Tusa noted in a report to clients on January 26th.