Boeing Co

Boeing is recovering in cash and in standing, but not yet in profit. Third-quarter free cash flow was positive at $464 million, debt has fallen $8.2 billion since December, the 737-7 and 737-10 are certified, and backlog reached a record $745 billion. Excluding a $252 million gain on selling a stake, operating earnings were about $102 million on $24.2 billion of revenue (my calculation). The commercial airplane unit lost $697 million after management delayed 737 and 787 production increases. Management's new target of about $2 billion of 2026 free cash flow requires roughly $2.4 billion in the fourth quarter alone, about five times the third (my calculation); the $20.7 billion of cash and investments gives the company time to deliver it.

• Revenue was $24.2B, up 4% from Q3 2025. Operating earnings were $354M against a $4,781M loss a year earlier, when a 777X charge hit. The net loss attributable to Boeing narrowed to $116M from $5,337M.
• Operating cash flow was $1.5B and free cash flow (operating cash flow minus capital spending) was $464M, against $238M a year earlier. Both came after about $0.7B of Justice Department settlement payments.
• The 737-7 was certified in the quarter and the 737-10 in October. In the same quarter Boeing decided to delay planned 737 and 787 rate increases, and it expects 737 stability at 47 a month in 2027.
• The Navy selected Boeing for the F/A-XX fighter, which is not yet in backlog. Defense backlog reached a record $101B.
• Management narrowed 2026 free cash flow to about $2B and gave its first multi-year targets: about $3B in 2027, $6B in 2028 and $10B in 2029. In August, $10B of revolving credit lines were renewed or extended with a new $5.0B minimum-liquidity covenant.

Its findings, each with the evidence, the strongest counterpoint and what would prove it wrong:

• Cash has turned positive, but it is running on customer deposits rather than airplane profits
• The commercial airplane unit still loses money, and this quarter pushed its recovery later
• Excluding a one-time gain, Boeing roughly broke even at the operating line
• Defense is growing, but its profit still hinges on legacy fixed-price programs and a troubled launch venture

Then its finances, the quality of its earnings, its management, the case for and against, and what to watch, its claims cited to the filings and checked against them.

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