Boeing earnings: when will BA target $10B free cash flow again?

Boeing BA stock is extending gains on Tuesday morning even though the airplane maker posted a wider-than-expected loss for its fiscal second quarter (Q2).

Investors are cheering BA mostly because the bottom-line weakness did not disrupt management's full-year outlook for up to $3 billion (approx. Rs 838.8 billion) in free cash flow.

More importantly, CEO Kelly Ortberg told CNBC in a post-earnings interview that Boeing could "soon" reinstate its long-term guidance for about $10 billion (approx. Rs 2.8 trillion) in free cash flow.

Following today’s rally, Boeing shares are hovering around the same price at which they started 2026.

What drove the wider loss in Boeing’s Q2?

The primary catalyst behind Boeing's Q2 bottom-line miss (76 cents per share loss versus 30 cents expected) was a fresh $280 million (approx. Rs 78.3 billion) charge on its high-profile VC-25B program, better known as the presidential Air Force One replacement.

On “Squawk Box”, CEO Kelly Ortberg noted that the company is pouring additional engineering and production resources into the program to complete modifications and flight testing on time.

Under the terms of the $3.9 billion (approx. Rs 1.1 trillion) fixed-price agreement signed in 2018, Boeing must absorb any cost overruns itself.

Beyond the presidential jet program, however, its Defense, Space & Security (BDS) unit continues to work through the tail end of legacy fixed-price contracts that have historically weighed on profit.

Ortberg emphasized that BA is stabilizing the unit as key programs hit operational milestones – such as full-rate production for the T-7 trainer jet and low-rate initial production authorization for the MQ-25 tanker – though fixed-price defense contracts remain a drag until fully delivered.

That said, Boeing’s defense revenue came in up 13% in the second quarter.

Why CEO Ortberg remains bullish on BA shares

CEO Ortberg’s optimism centers on clearing major regulatory hurdles for Boeing’s high-demand commercial jets, which he views as the ultimate catalyst for both cash flow and stock price.

Flight testing for the 737 MAX 7 and MAX 10 variants is now complete, with FAA certification for the -7 expected shortly and the -10 following later this year.

Securing approvals for these models, alongside final certification work on the 777X widebody that’s already seeing “super strong demand” from international carriers, is critical to unlocking deliveries from BA’s massive order backlog starting in 2027.

Ortberg emphasized that as regulatory uncertainty narrows and production deliveries accelerate, the resulting cash flow expansion will provide the concrete proof points investors need to drive Boeing shares higher.

How to play Boeing stock after Q2 earnings?

Another major long-term pillar of Boeing’s cash flow narrative relies on finalizing a highly anticipated 200-aircraft commitment from China, following Ortberg’s recent trip to Beijing alongside President Trump. 

While the headline deal represents BA’s first major sale to Chinese carriers in nearly a decade, the initial commitment has not yet moved into firm order books.

Ortberg clarified that Boeing is currently navigating the standard allocation process, working with Chinese officials and individual airlines to negotiate individual flight contracts.

Expressing zero concern about potential roadblocks, the CEO expects these binding agreements to close in the coming months, formally locking in the orders to expand Boeing’s backlog.

Note that Wall Street currently rates BA stock at “Overweight” with a mean price target of roughly $281.