Skip NavigationMarketsBusinessInvestingTechPoliticsVideoWatchlistInvesting Club
PRO
LivestreamMenuBoeing on Tuesday delivered encouraging second-quarter results, strengthening our conviction in CEO Kelly Ortberg’s turnaround and the runway ahead for the stock. Revenue in the second quarter rose 8% from a year ago to $24.56 billion, topping the consensus of $24.25 billion, according to estimates compiled by LSEG. Adjusted earnings per share (EPS) was a loss of 76 cents, steeper than the 30-cent loss expected by analysts, LSEG data showed. Free cash flow (FCF) came in at $631 million, much better than the consensus of a $177 million cash burn, according to FactSet. Shares rose more than 4% in late morning trading. The stocks of Boeing and many of its aerospace peers have experienced an up-and-down 2026, due in large part to the outbreak of the Iran war on Feb. 28. The five-month conflict has caused big spikes — and subsequent falls — in oil prices, raising concerns that airlines could cut flights to offset higher fuel costs. In the case of Boeing, there’s also been a concern that Middle East-based carriers could delay orders due to heightened instability in the region — though Ortberg said earlier this year that wasn’t happening. Boeing shares entered Tuesday’s release in one of their downdrafts, off almost 10% from their July 6 close, after the interim peace deal between Washington and Tehran collapsed this month . A pause in fighting in recent days has sparked a retreat in oil prices, including on Tuesday, but the geopolitical situation remains fluid. As of Monday’s close, the stock was about 16% below its highest close this year, at $252.15 a share on Jan. 23. That also represents the stock’s highest close since Ortberg took over in August 2024, tasked with cleaning up the planemaker following years of safety and quality crises. BA YTD mountain Boeing’s year-to-date stock performance. Why we own it While execution has been spotty under previous leadership, we believe the revitalization that investors have been waiting for is here under CEO Kelly Ortberg. Additionally, Boeing has been one of the biggest winners from the Trump administration’s trade deals with other countries. Competitor: Airbus Initiation: Sept. 8, 2025 Most recent purchase: March 19, 2026 Weighting in portfolio: 3.2% Bottom line Boeing took another step forward on its turnaround in the second quarter. The clearest indicator of progress is the stronger-than-expected free cash flow — the most important metric to evaluate Boeing at this stage of Ortberg’s tenure. “That’s why I think that you can still buy Boeing here,” Jim Cramer said on Tuesday’s Morning Meeting , when discussing the company’s second-quarter cash flow performance. Accordingly, we’re upgrading our rating on the stock to a buy-equivalent 1. Our price target of $275 a share remains unchanged. Boeing is now one of our aerospace stocks in our portfolio, following the separation of Honeywell Aerospace into a standalone company late last month. On Monday, we added to our position in Honeywell Aerospace, which makes cockpit systems, engines for smaller planes, and other components that make up the “guts” of aircraft. It is a supplier to Boeing and Boeing’s archrival Airbus. Quarterly commentary One of Ortberg’s most important tasks is improving Boeing’s production quality and output after U.S. regulators limited monthly manufacturing rates of its best-selling 737 Max family following the Alaska Airlines door-plug incident in January 2024. Customers pay for the bulk of a plane upon delivery, so the more planes that Boeing can make and hand over to customers, the more cash that flows into its coffers. As free cash flow improves, Boeing’s earnings should follow. It still reported a net income loss in the April-to-June quarter. But the good news is the Federal Aviation Administration has started to allow Boeing to increase 737 Max production. The regulator lifted the cap to 42 a month (from 38) in October and then to 47 in late May. Boeing’s next goal is 52 a month, followed by longer-term monthly targets of 57 and 63. On Tuesday’s earnings call, Ortberg said Boeing has started the process of ramping to 47 and expects “factory rollouts to reach 47 per month this summer.” He said the early results on production quality are “within our expectations, driven by the fundamental improvements we made to factory health.” While there have been questions about whether Boeing’s supply chain can support higher 737 production rates, Ortberg said he’s not seeing anything to be “overly concerned about” when eventually going to 52 from 47. “We will go when we’re ready,” he said, before acknowledging: “I think it’s going to get harder as we go from 52 to 57 and beyond that,” he said. “We are on our plan. Our plan is working.” As Boeing makes further progress on this production cadence, “the cash flow is going to be bountiful,” Jim said. The same cash-flow logic extends to Boeing receiving certifications for long-delayed new versions of existing aircraft — namely, the single-aisle 737 Max 7 and Max 10, and the wide-body 777X for long-haul flights. Orders for these planes are piled up in Boeing’s backlog and cannot be delivered until the Federal Aviation Administration gives final approval. Boeing expects to receive FAA certification for the 737 Max 7 “very soon,” Ortberg said, with the Max 10 approval anticipated in the wake of the Max 7 greenlight. “These pave the way to start deliveries in 2027, and I’m confident these newest members of the 737 Max family will deliver on the promise of greater efficiency and more capability for our customers,” Ortberg said. The Max 8 and Max 9 variants are the family members currently in the commercial skies. The 777X also remains on track for first delivery next year after the FAA advanced the jet to a later stage of test flights during the second quarter. Putting it all together, Boeing is actively scaling 737 Max production to support additional deliveries of current variants — and, crucially, still expects deliveries of Max 7s and Max 10s next year. And there’s been no change to the 777X timeline, either. With a record commercial backlog worth some $597 billion and consisting of over 6,200 airplanes, Boeing needs to get more jets turned over to customers. Everything we learned Tuesday supports that happening in the coming quarters and beyond. There were no major negative surprises for Boeing’s commercial segment. Indeed, Boeing reiterated expectations for 500 plane deliveries in 2026 and full-year free cash flow in the range of $1 billion to $3 billion. Boeing CFO Jay Malave also reaffirmed expectations for cash flow growth beyond 2026, saying that reaching $10 billion is “very attainable.” Wall Street expects $10 billion in free cash flow in 2028. The report wasn’t all good, though. The main blemish was in Boeing’s defense and space segment, which accounts for almost a third of companywide revenue. Here, Boeing booked a $280 million charge tied to its already delayed and over-budget Air Force One replacements, officially known as the VC-25B program. This charge contributed to Boeing’s earnings-per-share miss. Ortberg said Boeing made the decision in the quarter to “add significant resources to support the build and test schedule on VC-25B,” arguing these investments will help “mitigate potential risks during certification and flight tests.” While Ortberg called the charge “disappointing,” he said Boeing is investing to ensure it meets its commitment “to deliver this airplane in 2028.” Boeing entered into a $4 billion fixed-price contract to modify two 747 jumbo jets to serve as Air Force One in February 2018, during President Donald Trump’s first term in office. The deal put Boeing on the hook for any cost overruns, which have since materialized as the delivery timeline was pushed out. Ortberg’s predecessor, Dave Calhoun, previously said Boeing “probably” shouldn’t have agreed to the deal to begin with. It’s hard to disagree with both Calhoun’s past sentiments and Ortberg’s comments Tuesday. We don’t love seeing more charges in the defense business, but it is in Boeing’s best long-term interest to get this Air Force One refresh off its plate. If more investments now are what that takes, we can live with that as shareholders, provided the commercial business continues its progress. If there’s one more reason to look past this latest charge, it’s that it is not related to the KC-46A U.S. military aircraft tankers. Boeing booked roughly $600 million in losses on the KC-46A program during the fourth quarter of 2025, an unfortunate surprise at the time. On Tuesday, Ortberg said he believes Boeing has done a “really good job, finally, on that project.” One more thing to note: Going into the quarter, some analysts flagged Boeing’s negotiations with a labor union representing engineers and technical workers as a potential risk in the coming months. The current contract expires in October. On Tuesday’s call, Ortberg said Boeing began talks early with the union — the Society of Professional Engineering Employees in Aerospace (SPEEA) — and so far, “the tone of those talks has been respectful and productive.” Ortberg declined to go into much further detail when asked by an analyst during the question-and-answer section of the call, saying it would be “inappropriate.” He added, “I’ll just say that we’re keenly focused on it. … I’m very hopeful that we’ll get to an agreement and just keep on with our momentum.” (Jim Cramer’s Charitable Trust is long BA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.Read More
About The Author
