During the second quarter of 2025, in Boeing's financial report conference call, the company's executives expressed condolences for the recent air disasters and promised to provide assistance. At the same time, they emphasized that the company is steadily implementing recovery plans, committed to stabilizing operations, strengthening project execution, and changing corporate culture to lay the foundation for future development.

Boeing announced its largest wide-body aircraft order in history, involving up to 210 commercial aircraft, further driving its success in the defense sector. The company has successfully reduced travel workload by 50%, addressed safety and quality issues raised by employees, and streamlined over 1500 board construction documents to ensure the safe and high-quality delivery of aircraft. As of the second quarter, Boeing has delivered 150 commercial aircraft, with a total of 280 delivered in the first half of the year, the highest since 2018. The company plans to gradually increase the monthly production of the 737 and 787 to 42 and 7 aircraft, respectively, and is currently working with the FAA to stabilize production systems and seek approval.

Boeing is steadily advancing the 777X flight test program, having completed over 1400 flights and 4000 hours of flight time without any new technical issues. Production of the first 777X-8 aircraft has begun, and certification of derivative models of the 737 MAX family is expected to be completed by 2026. In the defense sector, Steve Park has been appointed permanent CEO of Boeing Defense, with the company making good progress on fixed-price development projects and signing several important contracts with the U.S. Air Force and Navy. The global services division continues to deliver outstanding performance, supporting both defense and commercial customers and expanding service networks worldwide. Additionally, Boeing is actively addressing the impact of the pandemic on global trade, while working on policy development and mitigating the effects of tariffs.

The leader of the aerospace industry in the United States emphasizes the importance of free trade for business, particularly highlighting the importance of maintaining a continuous supply chain. Despite facing challenges such as input costs and tariffs, the situation has improved through negotiation agreements such as bilateral agreements between the United States and the European Union and the United Kingdom. The industry appreciates the support from the government and is optimistic about resolving trade issues related to aircraft and components, while also focusing on stabilizing operations, improving project execution efficiency, and laying the groundwork for future development.

The company has recently promoted cultural transformation, including the establishment of new values and codes of conduct, which employees have responded positively to. This month, the company has further implemented a new performance management approach aimed at enhancing accountability, promoting career development, and measuring employee achievements through values and behaviors. These measures are crucial for the promotion and development of employees. The company's leadership expressed gratitude for the hard work of employees, emphasizing their contributions to the company's performance and customer commitments. At the same time, financial reports show that this quarter's revenue reached $42.7 billion, with a core loss per share of about $24, a significant improvement compared to last year, mainly due to increased business delivery volume and improved operational efficiency. The cash flow used was $2 million, reflecting an increase in business delivery volume and optimization of capital expenditures. Additionally, the company announced senior management changes, thanking the soon-to-be departing CFO and looking forward to the new CFO's arrival. In terms of product delivery and orders, the company has made significant progress, demonstrating long-term production plans and market confidence.

In the recent quarter, Boeing successfully delivered 70% of its projects, totaling 104 aircraft, including 42 produced in June, with a steady increase in production rate to 38 aircraft per month. Spirit AeroSystems continues to provide high-quality components, which is beneficial for production and recovery. Despite facing challenges such as inventory adjustments and certification delays, Boeing expects to maintain a production rate of 38 aircraft per month in the coming months, with plans to reduce inventory to more normal levels by 2023. The 777 project also showed improved stability in the quarter, with a current production rate of 7.1 aircraft per month and approximately 15 aircraft in inventory. In addition, the Defense, Space & Security department delivered 34 aircraft and two satellites in the quarter, with operating profit margin significantly increasing to 1.7%, reflecting the continuous recovery of the business and efforts towards high-profit margin goals. In terms of development projects, such as the MQ-25 and T-7 projects, Boeing is dedicated to reducing risks and delivering key capabilities to customers.

This business portfolio is expected to return to historical performance levels in the future, through stable production, executing development plans, and transitioning to new contracts with more stringent underwriting standards. Business Growth Services (BGS) has shown strong performance, with significant financial results and an order backlog of $22 billion, with revenue increasing by 8% year-on-year to $5.3 billion, mainly driven by increased commercial and government business volumes. Operating profit margin rose to 19.9%, with both commercial and government businesses achieving double-digit profit margins. In terms of cash and debt, the market net balance is $53.3 billion, the company maintains an unused credit line of $10 billion, while paying attention to investment ratings and supply chain stability. In terms of policies, the company continues to monitor trade policy developments, emphasizing the importance of free trade policies to commercial aerospace, and working closely with suppliers to control cost pressures.

It is expected that the free cash flow in the third quarter will be roughly in line with the second quarter, excluding the potential one-time payment impact from the Department of Justice (DOJ). This payment will lay the foundation for positive free cash flow in the fourth quarter, assuming commercial construction forecasts remain stable. Market research shows that the company's product portfolio is strong, as evidenced by significant backlogs in our orders.

Boeing Company provided a detailed explanation of its financial performance in the second quarter, particularly the $2.5 billion in free cash flow usage, which exceeded expectations. This improvement was mainly attributed to better BCA delivery performance and certain timing factors, especially the delivery of 13 777 aircraft in the second quarter, significantly higher than the usual 6 to 7 aircraft, bringing an additional $700 million in positive free cash flow to the company. Looking ahead, the company expects free cash flow in the third quarter to be similar to the second quarter, while mentioning possible one-time payments of $700 million and other influencing factors.

In recent discussions, Boeing emphasized the positive impact of several trade agreements announced since April on its orders and potential revenue, especially the zero-tariff agreement reached with the European Union. Boeing pointed out that these agreements, especially the new agreement with Japan, will help reduce its import costs, particularly for equipment imported from Japan. At the same time, the company is also focused on trade negotiations with Italy, hoping to reach a zero-tariff agreement as well. Boeing stated that despite facing cost increases and inflation pressure, the current trade environment is favorable for its pricing strategy management to cope with rising costs and maintain a healthy momentum in the order environment. Additionally, Boeing expressed concerns about the US-China trade relationship, hoping to avoid retaliatory tariffs due to trade imbalances, and to maintain stable trade relationships with Mexico and Canada.

In the discussion, Boeing detailed its plans to increase production rates for the 737 Max and 787, especially in response to strong market demand for the 787 and the acceleration of the wide-body aircraft replacement cycle. The company stated that they are gradually increasing production rates while ensuring the stability of the production system and meeting quality requirements. Additionally, the company mentioned its investment expansion plan in Charleston to address the growing demand for the 787 aircraft.

During the discussion, it was mentioned that Boeing's guidance for Max aircraft deliveries this year is expected to be between 70 and 80 aircraft. It was also mentioned that there is a possibility of exceeding the previous target of 400 deliveries, reaching 425 aircraft or more. Additionally, the inventory situation of the 777X aircraft was discussed, and despite significant losses on this model, the total inventory is still on track as expected. The issue of engine icing was also mentioned, stating that resolving this issue will require more time as problems have been found during the current design implementation, necessitating additional design changes.

Boeing Company discussed its plan to increase production to unprecedented levels, especially for the Max series aircraft, with a goal of reaching a monthly output of 27 to 52 aircraft within six months. The company stated that this ambitious goal is based on increased inventory, factory capacity, and a deep understanding of supply chain management. It was specifically mentioned that the fourth production line will focus mainly on producing the 10 variant, and current inventory levels will not become a bottleneck in the short term for the supply chain. Boeing emphasized that by gradually increasing production rates, they will ensure product quality and continuously monitor and address potential issues in the supply chain to meet market demand.

In the discussion, the change in the airline industry's EPS (earnings per share) margin profit was mentioned, especially in the development trends after the launch of different projects. Although the current market expectation is negative, it is expected that the negative situation will gradually decrease every quarter, with the negative growth in the second quarter decreasing from 6.6% to 5.1%, and it is expected to continue to improve in the future quarters. In the long run, despite facing challenges, the industry remains optimistic, believing that it can return to historical profit margins. The key lies in continued recovery plans, improving productivity, and better adjustments to business conditions in the future.

In the discussion, Boeing mentioned the opportunity for margin improvement in its DBS business and the potential risk of strikes. The company stated that despite the risk of strikes, their impact is limited and the company has the ability to manage and respond to them. In addition, Boeing emphasized that in the process of signing new contracts, measures are being taken to avoid past pricing errors and reduce project risks through active management to achieve high unit margin goals for the DBS business. The T7 project serves as a successful case study, demonstrating how the company collaborates with customers to change project outcomes for mutual benefit.

In the meeting, the company's recent financial performance was discussed, especially regarding the situation of free cash flow. It was pointed out that if the trends of the second quarter were continued into the third quarter, with an additional amount of 700 million, the fourth quarter would need to almost break even in order to achieve the annual target of -3. At the same time, consensus on the cash flow expectations for 2027 and 2028 was within the framework of 10 billion, and it was asked whether this framework still applies after considering the 4 billion in operating capital, and whether the company is moving towards a stable state.

The discussion focused on the future design decisions in the aviation industry, particularly regarding the positive performance in Italy in the fourth quarter and its relationship with delivery and performance. In addition, the discussion also explored the engine architecture decisions for the new generation aircraft by Airbus in the face of competition, and when BCA needs to start making similar design decisions to stay competitive. The discussion also involved considerations of technological maturity, market timing, and overall strategy.

The company's leadership expressed satisfaction with the performance in the first half of the year, emphasizing the challenges of the macroeconomic dynamics. They highlighted that the company is gradually adjusting its direction with excellent talents and market positioning. Despite making progress, continued efforts are still needed to address existing problems, enhance customer trust and product confidence. They also put forward expectations and requirements for the work in the second half of the year.

Boing company has completed the earnings conference call for the second quarter of 2025, thank you to all participants for joining.