I’m Amazed That Boeing Can Be a Stellar Company Again
Revenue up 18%, deliveries up 57%, and a vote of trust by institutional investors
Look no further than Boeing to see a hugely successful company that f*cked up its customers, management, and planes.
It still blows my mind that Boeing couldn’t fix its flawed software that led to two 737 MAX crashes in 2018-19 that killed 346 people. The software relied on a single sensor to measure the plane’s nose tilt.
When the sensor failed, it signaled a drop threat. The plane was flying fine, but the software kept pushing its nose down even though the pilots tried to correct it.
Imagine being several kilometers above the ground and facing this deadly situation you can’t resolve. Boeing knew about the issue but didn’t fix it until after the second crash.
Ethically I’d say Boeing should’ve faced more than just lawsuits. It should’ve been forced into bankruptcy.
But Boeing is unique. It’s one of the two major global jet manufacturers (Airbus is the other). The people responsible for the mess-up are long gone. And Trump promised to bail Boeing out.
Will the company get its act together?
Those plane crashes were only the beginning
There’s no need to despise a company that used to be run by incompetent people.
Boeing has suffered enough for its mistakes. It was a victim of the Covid pandemic due to the restrictions on air travel. Its stock lost 74% and didn’t come back.
Boeing is in the Aerospace & Defence industry. The industry should do well in the current global situation. So Boeing is a strategically important company.
Trump wanted to save Boeing by giving it a few billion dollars in 2020. But Boeing opted out of the federal aid. Its then-CEO Dave Calhoun refused to give the government an equity stake. The company raised $25 billion in a bond offering instead.
In 2021, Boeing agreed to a $2,5 billion settlement including a $243 million fine, $1.77 billion for airlines (Lion Air and Ethiopian Airlines), and $500 million for victims’ families.
If only it were the end of Boeing’s trouble.
Social media shows videos after a door plug component gets blown out mid-flight (Alaska Airlines, Jan 5, 2024).
There were more emergencies with other planes. Every time something went wrong during a flight, Boeing stock would tank. The situation reached the ridiculous point when the stock no longer reacted to the failures.
The company reached its lowest point. From there on, things would only get better.
I’m not being sarcastic.
Things might be on the brink of a turnaround
Boeing just published a Q1 2025 earnings report. Compare the CEOs’ statements in 2023-24 with the one this week.
2023: They’re progressing through supply chain disruptions (nothing good here).
2024: They’ll take time (Boeing stock won’t grow).
2025: They’re moving in the right direction. Now we’re talking.
Boeing is “recovering.” It’s not collapsing but its position is still fragile.
Revenue growth YoY: 18%
Deliveries: up 57% YoY
Total backlog: $545 billion
Long-term revenue potential is there.
But.
Boeing is still burning money.
Its debt of $53,6 billion is a concern.
Its free cash flow is negative (-$2,3 billion in Q1 2025).
Will it be a steady recovery from here? The earnings report doesn’t reflect what lies ahead. There’s uncertainty.
Good news: In March 2025, Boeing secured a $20 billion government contract for the Next Generation Air Dominance fighter platform.
Bad news: Trump’s tariffs could mess up Boeing again. For example, a jet intended for the Chinese company Xiamen Airlines was just returned to the US.
Billions of dollars are flowing into Boeing
Let’s look at more subtle positive signs.
Boeing stock tanked along with the rest of the market once Trump began acting like a global kingpin. Then the stock came back to the same sideways price range it was in earlier this year and last year.
This must be the company’s fundamental value. Its business operations and financials need to improve to break out of this range.
It doesn’t look like it will happen in the next few weeks. The stock is likely to move sideways from here on. And it’s not a bad sign.
Institutional investors seem to believe in Boeing.
Vanguard, BlackRock, State Street Corp., Price T Rowe, and others bought large amounts of Boeing stock last quarter. They’re long-term investors who can stomach occasional panic in the market.
Do they know something we don’t?
It’s a sign of trust when these investors allocate billions of dollars to a public company. And institutional ownership of 74% is high for a large old company (e.g., it’s 65% for Nvidia and 72% for Microsoft).
I wouldn’t invest in Boeing right now. But this roughed-up giant could be a turnaround story.
Keep an eye on the stock and wait for the next earnings report.
The bottom line
Successful businesses expand for decades when they’re able to reinvent (think Amazon, Microsoft, and Apple).
Boeing reached the peak of its cycle in 2019 and hasn’t reinvented so far. It needs more than a new product.
Boeing needs to restore trust. First it was flawed software, then financial issues, then a door plug blowout. You know it’s bad when passengers are trembling as they board.
Sure, the government could help if things go wrong again but good businesses can’t rely on government bailouts.
Boeing should also hit its production targets with 737 MAX (38 planes per month) and deliver the delayed 777X by 2026. Another catalyst for growth is an expansion of its defence segment through government contracts.
Boeing has a chance of becoming a good company again. Watch for signs of approaching positive cash flow and positive earnings.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.
Interesting Post! I would love to hear a little more about the economics of the business!
Haha yep I invested in this when it was tanking. Not too much but a little.