Leeham News and Analysis
There's more to real news than a news release.
Boeing FY2025: Company posts small profit on Services division; BCA still losing money
By Karl Sinclair
Jan. 27, 2026, © Leeham News: The Boeing Company (BA) released its full-year 2025 results, and indications are that the company is headed in the right direction. However, some monumental tasks face the corporation in the short-to-medium term.
Boeing Commercial Aircraft (BCA) is still in a loss-making position. BCA lost $7bn, compared with $8bn in 2024. Boeing Defense, Space and Security (BDS) was near break-even. Boeing Global Services (BGS) was the only profitable division, boosting the corporation to an annual profit on the back of the $10.6bn sale of part of its business.
BCA delivered 160 aircraft during 4Q2025, including 117 of the cash-cow 737 MAX series and 27 Dreamliners.
This boosted BCA revenues in the final quarter to $11.379bn, up from $4,762bn, year-over-year (YoY). Full-year revenues hit $41.494bn, almost doubling 2024 sales of $22.861bn.
Source: All tables and images via Boeing.
The company is adamant about demonstrating stability in production and the supply chain at rate 42/mo, before making the leap to 47/mo by mid-2026.
787 rates are expected to stabilize at 8/mo, as investments in the Charleston (SC) production facilities begin to take shape, boosting output into the double digits in 2026.
Company-wide results
Strong results at BCA boosted revenues to $89.463bn, a whopping gain of $22.946bn over FY2024.
BDS also reported decent gains of $3.316bn, while BGS added $969m over last year.
Boeing earned $6.267bn in FY2025. However, this was bolstered by a $9.6bn gain on the spin-off of Jeppesen from BGS, which will undoubtedly reduce revenues at the division, moving forward.
BDS essentially broke even in FY2025, a nice change from FY2024 when it cost the company $5.413bn. This includes a further $565m write-off on the KC-46 program, which CEO Kelly Ortberg termed “a bad contract for the last decade, this existing contract.” Boeing entered into the contract during the former CEO Jim McNerney’s tenure. Total write-offs now are nearing $7bn.
BCA trimmed it losses from last year, but still is operating in the red, to the tune of $7.079bn.
The built-up inventory unwind is fairly complete, with aircraft requiring re-work down to one 737 MAX and a further five 787s from previous years’ production remaining.
As such, traveled work has been cut by a further 30%, with all Key Performance Indicators (KPI) in the green.
Boeing is looking to leverage significant investments in production facilities, most notably the new North production Line in Everett (WA) and the Charleston 787 assembly plant expansion, to produce its way back into the black.
Airplanes don’t make profits, do they?
Boeing CEO Kelly Ortberg.
On the FY2025 earnings call, CEO Ortberg was asked by Ron Epstein from Bank of America, “…it seems like on a very fundamental level that [OEM airframe manufacturing is] just not a very profitable industry…. It seems like everybody else is making money on planes from guys doing seats, faucets, engines, aftermarket parts. Can that change on a future airplane?”
Ortberg was diplomatic in his response, now having worked both sides of the Tier 1 and OEM equation. He replied, “I know how you can make a really good margin in this aerospace market. And I see how you can not make a very good margin in the aerospace market.”
This alludes to the critical investments in plant and manpower that Boeing is currently making, which were shunned by previous management teams. These capital injections into key components of the company will bear fruit over time.
However, there is also some cleaning up of the previous mess, which requires attention.
Boeing is carrying $54.1bn in consolidated debt, with significant payments coming due in the short-to-medium term, most notably a balloon payment of ~$8bn in 2026 to lenders.
Interest and debt expense rose slightly to $2.771bn, up from $2.725bn in FY2024.
Operating cash flows rose during the year, a welcome sign, with additions to Charleston (787 program), Everett (737 program) and St. Louis (BDS programs) reducing that by $956m.
Management was pressed by analysts on free-cash-flow (FCF) expectations for the future.
Projections but no guidance
Boeing CFO Jay Malave.
CFO Jay Malave was upbeat about projections, despite some short-term headwinds that need to be addressed. He elaborated:
“2026 is a big, big year for us, as Kelly mentioned. We have to get through our certification programs. We also have rate ramp increases as well…I went through this in the fourth quarter, and I’m very comfortable with our ability to achieve $10bn (in FCF). Again, it’s a little bit of a repeatable sequence of events, but we have to get through the certification programs. We have to ramp up on our BCA production rates. We need to see the improving performance at BDS related to our margin profile as well as burning off the prior charges, and in continued performance at BGS.”
Segment Analysis
BCA
Boeing Commercial has a lot on its plate in 2026.
Chief amongst the tasks is ensuring that the 737 MAX 7 and 10 variants get certified and into service with airlines during the year. Built up inventory on those types remains at around 35 units. The Max 10 is currently going through expanded flight testing, granted by the FAA with TIA-2, with a permanent design fix completed on the engine cowling issue. The reintegration of Spirit Aerosystems into the Boeing family will cost the company ~$1bn, but will also bear fruit in the future.
The 787 program is expected to hit rate 10/mo in 2026, which is the maximum capacity with the existing infrastructure. However, management expects no supply-chain constraints with the program on the ramp-up.
Touched upon in the earnings call was the short-term burn off of customer compensated aircraft, also a leftover from previous management, which will affect cash flows moving forward.
The 777-9 is still expected to receive certification in 2027, with durability issues on the General Electric GE9X engines identified. The program continues with TIA-3 testing ongoing, which involves the engines, avionics, and CPU.
The cost is estimated to be ~$3.5bn spent on the 777X program, with a drag on FCF expected to continue until 2029.
All of this is ongoing, as the company ramps up from rate 42/mo on the 737 program to 47 by mid-year. A good portion of the ramp-up will be borne by higher-than-normal inventory levels, which will aid suppliers in getting accustomed to the new rates.
Moving beyond 42 to 47/mo will be a bigger endeavour.
Increasing Production
Ortberg detailed the production horizon:
“[The] Supply chain on that ramp [is] not a big issue for us right now, and we projected that. As you know, we’ve got a lot of inventory there. I actually don’t think supply chain is going to be a big challenge for us in the next rate ramp from 42 to 47. But that’s where we start to normalize with the supply base in terms of burning off the excess inventory. As we’ve said, going from 47 to 52 will be where we’ll have to see improved performance from the supply chain. We’ve got time. We’re working that diligently with the supply chain.”
It seems as though the relationship is much improved in the supply chain, as Boeing works with its suppliers, with little mention of the previous “Partnering for Success” program.
In 3Q2025, Boeing took a $4.9bn charge against the 777X program, which had the net effect of increasing the Program Accounting loss from ~$2.2bn to $7.079bn for FY2025.
This brings it in line and mirrors the unit-cost accounting loss figures for the year. In order for the division to contribute positive results to the company, it is imperative that the unit-cost numbers reach positive integers moving forward. It is unclear if that will happen in 2026.
BDS
Boeing Defense made some positive strides during the quarter, yet was held back by another write-off on the KC-46 program.
This time around, it cost the company $565m, as total losses on the program began to reach double-figures. This has been offset by another order for 15 tankers, as the company hopes to put those losses in its rear-view mirror.
Crucially, the company has signed an agreement with the IAM union local in St. Louis (MO) and will avoid any work stoppages there with labor peace in place for the next five years.
BDS revenues were up 7% over FY2024, to $19.817bn, and generated a modest margin of 1.9% or $379m, a welcome change over the $3.146bn loss of the previous year.
The KC-46 write-off was detailed as a “discrete charge,” specific to the program and indicative of higher production costs associated with the 767 commercial aircraft, on which the tanker is based.
Once again, management is going to produce its way into positive territory, as it projects to deliver 19 tankers in 2026, versus 14 in FY2025.
A highlight for BDS during the year was the first operational delivery of the T-7A Red Hawk to the US Air Force at Joint Base San Antonio-Randolph. A welcome indicator that revenue streams will begin on another Boeing defense program.
BGS
While the news is normally quite subdued at Global Services as it quietly goes about generating ever-increasing revenues and margins quarter after quarter, a portion of the division was sold, which added a net $9.6bn to Boeing’s coffers. The Digital Aviation Solutions transaction did not immediately impact revenues in FY2025.
This would naturally be expected to change in 2026, as the loss in expected revenues begins to take hold. Earnings and margins were outsized for the year, as the profits from the one-time transaction were realized. Sales in FY2025 were up 5%, over FY2024 – which mirrors previous results of a 4% gain, YoY:
If the $9.6bn gain is removed from the equation, BGS still earned ~$3.874bn during the year, versus $3.618bn in FY2024.
The Boeing management team seems to have focused on what tasks need to be accomplished to get the underperforming divisions back into positive financial territory, while making difficult financial decisions with divestitures to bolster the balance sheet.
Those EIS dates for the Boeing 777-X seem to continue to slip: now the reporting here is *certification* in 2027, not EIS as previously (recently) reported.
Corrections welcomed.