Boeing Company (BA)

Boeing Company Q1 2025 Financial Report

Report Date: 2025-04-24
Period Covered: Quarter Ended March 31, 2025
Form Type: 10-Q

1. Key Financial Highlights

• Total Revenue: $19.50 billion (↑17.7% YoY from $16.57 billion)
• Net Loss: $355 million vs. net loss of $? in Q1 2024
• Loss per Share (Diluted): $0.016 vs. $0.056 in Q1 2024
• Operating Income: $323 million (↑16.6% YoY)
• Total Debt: $53.62 billion (↓0.46% QoQ)

2. Revenue & Profit Analysis

• Commercial Airplanes (BCA): $8.15 billion vs. $4.65 billion

  • Higher deliveries (ex-737 Max customer concessions) drove a $3.49 billion YoY increase.
  • Operating loss narrowed to $537 million from $1.14 billion, reflecting improved deliveries and lower quality-control charges.

• Defense, Space & Security (BDS): $6.30 billion vs. $6.95 billion

  • Lower volume (KC-46A, Ground-Based Midcourse Defense) and absence of a favorable MQ-25 contract catch-up reduced revenues.
  • Operating profit of $155 million vs. $151 million, aided by lower negative catch-up adjustments.

• Global Services (BGS): $5.06 billion vs. $5.05 billion

  • Government services growth offset modest decline in commercial services.
  • Operating profit improved to $943 million from $916 million.

• Unallocated & Overhead: $(362 million) vs. $(312 million)

  • Increased unallocated expenses on pension allocations and corporate support.

• Interest & Taxes:

  • Net interest expense rose to $708 million from $569 million on higher average debt.
  • Effective tax expense of $107 million vs. a benefit in Q1 2024; includes discrete valuation allowance adjustments.

3. Debt & Liquidity

• Total Debt: $53.62 billion (current portion $7.93 billion + long-term $45.69 billion).
• Cash & Short-Term Investments: $23.68 billion combined.
• Revolver Capacity: ~$20 billion undrawn across three credit facilities expiring 2025–2029.
• Operating Cash Flow: $(1.62 billion) used vs. $(3.36 billion) in Q1 2024.
  • Improvement driven by better working-capital management and customer concession payments.
• CapEx: $674 million vs. $567 million (focused on tooling, automation and defense programs).

4. Reasons for Current Loss

• **737 Max quality program costs and lower-rate production ramp.
• Pension and post-retirement allocations under CAS vs. GAAP unallocated to segments.
• Elevated R&D spending to support future products (787, 777X, next-generation fighters).

5. Pros & Cons

• Pros:
  • Strong commercial backlog ($460 billion) with firm orders across 737, 787 and 777X.
  • Defense wins (F-47 next-generation fighter) and growing global services footprint.
  • Healthy liquidity with $44 billion of available cash/reserves.
• Cons:
  • Ongoing 737 Max production quality costs and supply-chain drag.
  • Exposure to fixed-price program risks (KC-46A, MQ-25, Starliner) with potential catch-up losses.
  • Geopolitical/trade tensions (US-China tariffs) may affect deliveries, pricing and market share.

Prepared by Financial Analysis Team

Segment Revenue (Q1 2025 vs. Q1 2024):

• Commercial Airplanes: $8,147 M (↑75%)
• Defense, Space & Security: $6,298 M (↓9%)
• Global Services: $5,063 M (↑0.4%)

Revenue by Region (BCA only, Q1 2025):

• Non-US: $4,337 M
• US: $3,783 M

Revenue Recognition Mix:

• Fixed-price / time and materials / over-time contracts: 100% deliveries for commercial aircraft, varied structures in defense and services.

Backlog (March 31, 2025):

• Total: $544.7 billion
  • BCA: $460.4 billion
  • BDS: $61.6 billion
  • BGS: $22.0 billion

Boeing’s Q1 2025 results show early signs of stabilization in its core commercial and services businesses, driven by the resumption of 737 Max deliveries and continued global services growth. Liquidity remains robust, with significant revolver capacity and a large cash/investment balance. The modest QoQ debt reduction and improved operating cash flows reflect better working-capital execution. However, ongoing quality-control costs on the 737 program, potential losses on complex fixed-price defense contracts, and geopolitical/trade headwinds are key near-term challenges. Over the medium term, the company’s extensive backlog, defense awards (e.g., F-47), and anticipated ramps in high-margin services position Boeing for improved margins. Investors should watch certification progress on 777X, supply-chain stability, and defense program performance as leading indicators of future profitability.