The Boeing Company Q2 FY2025 earnings call

1. Expressed sincere condolences for Air India Flight 171 and provided technical assistance. 2. Recovery plan is taking hold with progress in stabilizing the business, strengthening development program execution, and changing the culture. 3. BCA is seeing the benefit of ongoing investments to stabilize the production system, delivered 150 commercial jets in the quarter, with 737 ramping to 38 per month and 787 production rate at 7 per month. 4. Boeing Defense and Space named Steve Parker as permanent CEO, with a good quarter on fixed price development programs. 5. BGS had a strong quarter with delivery of the first P-8 with enhanced anti-submarine warfare technology and opening of third parts distribution center in Germany. 6. Progress on culture change with employees embracing new values and new performance management approach.

Boeing Commercial Airplanes (BCA) delivered 150 airplanes in the quarter, with revenue of $10.9 billion and an operating margin of -5.1%. Boeing Defense and Space (BDS) booked $19 billion in orders during the quarter, with backlog growing to $74 billion, revenue of $6.6 billion, and an operating margin of 1.7%. Boeing Global Services (BGS) had revenue of $5.3 billion, up 8% year-over-year, with an operating margin of 19.9% in the quarter.

1. Expect free cash flow to be similar to second quarter usage in third quarter before potential one-time DOJ payment, with fourth quarter expected to be positive. 2. BCA deliveries: 737 on track to potentially deliver more than 400 for the year, 787 expected to be in the 70-80 delivery range. 3. Expect certification of 737-7 and -10 to occur in 2026, with no material impact on production plans.

1. Dynamic global trade environment with potential impacts of tariffs. 2. Delay in engine anti-ice solution certification for 737-7 and -10, causing certification to be pushed to 2026. 3. Potential strike risk in Boeing Defense and Space business involving ~3,200 employees.

Q: How to translate the second quarter free cash flow performance to the full-year target?

A: Brian West stated that $3 billion is a reasonable assumption, with third quarter free cash flow expected to be similar to the second quarter, and the fourth quarter expected to be positive.

Q: What is the impact of tariffs on Boeing?

A: Robert Ortberg mentioned that trade agreements like with the EU and UK are helpful, but need to watch for retaliatory tariffs with China and developments with the USMCA.

Q: What is the delivery guidance for MAX and 787?

A: Brian West said the 737 is on track to deliver more than 400 for the year, and the 787 is expected to have around 70-80 deliveries.

Q: What's the issue with the engine anti-ice solution for 737-7 and -10?

A: Robert Ortberg explained that design changes are needed due to testing issues, leading to the certification being delayed to 2026.