Home / Business and Economy / Boeing Beats Revenue, Reaffirms Cash Flow Goal
Boeing Beats Revenue, Reaffirms Cash Flow Goal
28 Jan
Summary
- Boeing's stock surged after reaffirming a $10 billion free cash flow goal.
- Quarterly revenue rose 30% year-over-year, exceeding analyst expectations.
- A $600 million loss on the KC-46A program impacted the defense segment.
Boeing's stock demonstrated significant volatility, initially declining following the release of its quarterly earnings due to an unexpected loss in its defense business. However, shares reversed course dramatically, briefly reaching a 52-week high after the company's management reassured investors about its "very attainable" goal of achieving $10 billion in annual free cash flow in the coming years.
For the fourth quarter ending December 31, Boeing reported a 30% year-over-year increase in revenue, reaching $23.95 billion, which exceeded consensus estimates. The company also delivered $375 million in free cash flow, surpassing expectations. For the full 2025 fiscal year, Boeing recorded $1.9 billion in free cash outflows, a substantial improvement from the previous year's outflow of $14.31 billion.
The Defense, Space & Security segment reported a $507 million loss for the quarter, primarily due to approximately $600 million in losses on the KC-46A program. Despite this, the segment's revenue grew by 37%, and its backlog expanded to a record $85 billion.
Boeing's Commercial Airplanes division experienced a surge in revenue, up 139% to $11.38 billion, with a significant increase in deliveries. The company reported a record overall backlog valued at $692 billion, with Commercial Airplanes contributing $567 billion of that amount.
Management also provided positive future outlooks, expecting full-year 2026 free cash flow to be between $1 billion and $3 billion. While the first half of 2026 is anticipated to have negative free cash flow, the second half is projected to turn positive and accelerate. Boeing is reiterating its buy-equivalent rating and a $275 price target, anticipating stock appreciation based on production improvements and growing free cash flow.
A potential durability issue identified on the 777 engine, in collaboration with supplier GE, is under investigation but is not expected to impact 2027 delivery rates. Global Services revenue saw a modest increase, driven by higher government volumes.
