The Boeing Company Q1 FY2026 earnings call

Key managerial messages include: Commercial airplanes team integrating safety/quality plan, increasing production rates; Defense space team stabilizing operations with milestones like Artemis II launch; Global Services adding orders and delivering solid results. Progress on 737 certification, 777-9 testing, 787 FAA certification for increased takeoff weight. BDS work reducing risk in development programs with wins like KC-46 tanker performance and MQ-25 high-speed taxi tests. BGS having notable wins including largest maintenance contract and landing gear exchange contract.

Commercial Airplanes (BCA): Q1 delivered 143 airplanes, revenue $9.2 billion, up 13%, operating margin -6.1% improved from prior year. Defense (BDS): Delivered 29 aircraft and 1 satellite, revenue $7.6 billion, up 21%, operating margin 3.1%. Global Services (BGS): Revenue $5.4 billion, up 6%, operating margin 18.1% down from prior year but both commercial and government businesses delivered double digit margins.

Management expects positive free cash flow of $1 to $3 billion this year. On production rates, BCA on track to increase to 47 per month in summer and beyond with North Line activation. Defense business expects growth from increased operational tempo and defense budgets. Global Services continues focus on profitable, capital-efficient service offerings.

Potential impact from Middle East conflict on aviation services business, supply chain disruptions affecting production rates, and risks associated with defense program certifications and change incorporation for built airplanes.

Q: Thoughts on Middle East conflict impact on deliveries, services, free cash flow and scenario planning.

A: No impact on deliveries so far, watch fuel prices and services business, can resequence airplanes.

Q: Dig deeper on defense portfolio growth.

A: Product lines utilized in current war environment, defense budget increases benefiting F-47, KC-46, F-15EX, enhanced SATCOM, and missiles/wapons.

Q: Free cash flow profile for rest of year.

A: Back-end loaded, second quarter outflow in low hundreds of millions, confident in $1-3B guide.

Q: 737 production timeline and supply chain.

A: Stabilizing at 42, moving to 47 by summer, North Line activation for 52, monitoring supply chain.

Q: 787 supply chain and financial profile.

A: Stabilizing production, working on seat certifications, cost-based extension improving financial profile.

Q: 777X certification and production.

A: TIA4A approved, working on TIA4B, GE working on engine fix, targeting 5 per month.

Q: BCA margins trajectory.

A: Expect progressive improvement, turning positive mid next year.

Q: Spirit and 777X changing corp.

A: Spirit cash drag to improve next year, changing corp for 777X involves incorporating changes over years.

Q: BCA order campaigns, especially China.

A: China orders dependent on US-China relations, big opportunity expected with summit.