Boeing shares swing wildly on mixed results, but the turnaround is progressing
Production improvements, coupled with improving free cash flow, tell us the stock should move higher this year.
TL;DR
- Boeing's stock initially fell after reporting a Q4 earnings miss, primarily due to losses in its defense business.
- Shares recovered and reached a 52-week high after management expressed confidence in achieving future free cash flow goals.
- Fourth-quarter revenue increased by 30% year over year to $23.95 billion, exceeding estimates.
- The company reported a $507 million loss in its Defense, Space & Security segment, largely driven by issues with the KC-46A program.
- Commercial Airplanes revenue surged, with deliveries increasing significantly.
- Boeing maintained a record backlog valued at $692 billion.
- Management expects full-year 2026 free cash flow to be positive, ranging between $1 billion and $3 billion.
- A potential 'durability issue' was identified on the 777 engine, but it is not expected to impact 2027 delivery rates.