BOEING (BA) Q2 FY26 earnings call: guidance and Q&A

Can you elaborate on the strong Q4 cash flow implication and the shape of the cash flow curve for out-years, especially regarding 2027 pricing/concessions?

Q4 free cash flow is expected to be strong due to rising BCA deliveries, BDS improvements, and seasonal advances like the KC-46. The company is confident in reaching $10 billion in free cash flow by the end of the decade, with further growth beyond. Clarity for 2027 will come after the current planning cycle.

“We're confident in the $10 billion figure. We're confident that we're going to get there, and we're on the right track.”

asked by Seth Seifman · answered by Jesus Malave

At what point do supply chain challenges become more difficult for 737 rate increases (47 to 52, 57, 63), and what is the path to 737 margin levels seen in 2018?

No immediate supply chain concerns for the ramp to 52 per month, but 52 to 57 and beyond will be harder. Margin improvement will come from increased delivery cadence, fixed cost absorption, better-priced backlog, and improved mix, aiming to approximate 2018 levels for 737 and surpass them for 787 by the end of the decade.

“I think it's going to get harder as we go from 52 to 57 and then beyond that.”

asked by Douglas Harned · answered by Robert Ortberg

Can you clarify the situation with GE engine deliveries for the 787 and the status of 787 seat certification delays?

787 engine deliveries have fallen behind in the first half, with a recovery plan being worked with GE. Seat certifications will continue to cause lumpy deliveries through the balance of the year, as not all certifications are complete.

“the seat certifications are going to be with us for the balance of the year. And so that may make our our deliveries a little bit lumpy.”

asked by Robert Stallard · answered by Robert Ortberg

How would you frame the risk associated with the ongoing SPIA labor negotiations?

Negotiations started early to avoid a work stoppage, and the tone has been respectful. While hopeful for an agreement, the company is also planning for potential work stoppages, though they do not expect it to be the case.

“we're looking very hard at what we would do should we have a work stoppage and what plans we can put in place.”

asked by Peter Arment · answered by Robert Ortberg

The 55% completion of 777X flight tests seems low for year-end completion. Can you explain the step functions and confirm if Phase II is complete?

55% represents certification credit, and the pace is accelerating, with resources from completed 737 variants being reallocated. The scope of TIAs can be a moving target, but milestones are being achieved with multiple aircraft flying daily.

“55% is pretty good. Remember that we pre-dry-run most of these flight tests. So what we're talking about is actually the certification credit.”

asked by Myles Walton · answered by Robert Ortberg

How comfortable are you with 737 rate ramps given engine supply chain concerns, and will Boeing play a more active role in helping suppliers expand capacity?

Comfortable with rates 47 and 52 due to existing inventory and CFM deliveries. Higher rates (57, 63) will require more supply chain work. Boeing will continue to work with suppliers on capital-driven constraints, especially Tier 2 and Tier 3, as constraints show themselves.

“Where we still have work to do is as we get to the higher rates, 57, 63, those continue to be areas that we're working with the supply chain.”

asked by Kristine Liwag · answered by Robert Ortberg

Is new airplane innovation key to improving profitability in the industry, given the age of current aircraft and engine innovation?

There's no change in the new airplane strategy. The next airplane presents an opportunity to change the value chain participation and profitability mix, potentially through different business partnerships and engagement with the supply chain, moving beyond traditional models.

“the next airplane has the opportunity to change that. And I can tell you that we're spending a good deal of time looking at where the value is in the aircraft going forward and how do we participate in the value chain, maybe differently than what you've classically expected us to do.”

asked by Ronald Epstein · answered by Robert Ortberg