Boeing’s defense arm surges while company stays unprofitable

Boeing reported first-quarter 2026 revenue of $22.2 billion on April 22 — a 14 percent jump from a year ago — but the aerospace giant remained unprofitable, posting a net loss of $7 million even as its defense business delivered its strongest quarterly performance in years.

The results cover the three months ended March 31, 2026. Revenue rose from $19.5 billion in Q1 2025 to $22.2 billion this quarter, driven primarily by 143 commercial airplane deliveries — up from 130 a year ago. Despite the revenue growth, Boeing recorded a GAAP diluted loss per share of $0.11 and a core loss per share of $0.20. Operating cash flow came in at negative $179 million, a significant improvement from negative $1.6 billion in Q1 2025. Free cash flow was negative $1.5 billion, compared to negative $2.3 billion in the same period last year. Cash and investments in marketable securities stood at $20.9 billion at quarter’s end, down from $29.4 billion at the start of the quarter, reflecting $6.95 billion in debt repayments during the period. Consolidated debt fell to $47.2 billion from $54.1 billion.

Total company backlog reached a record $695 billion, with all three business segments — Commercial Airplanes, Defense Space and Security, and Global Services — posting record backlog levels simultaneously. Commercial Airplanes backlog alone stood at $575.6 billion, covering more than 6,100 aircraft. Defense Space and Security backlog grew to a record $86 billion, with 27 percent of that representing orders from customers outside the United States.

The defense segment was the quarter’s clearest bright spot. Defense, Space and Security posted revenue of $7.6 billion, up 21 percent from $6.3 billion in Q1 2025, with operating earnings of $233 million — a 50 percent increase from $155 million a year ago. Operating margin improved to 3.1 percent from 2.5 percent. During the quarter the segment signed a seven-year framework agreement to expand PAC-3 Seeker production — a direct response to surging demand for missile defense components — and announced a strategic partnership with Rheinmetall to offer the MQ-28 Ghost Bat uncrewed combat aircraft to Germany. In April, the Boeing-built Space Launch System core stage successfully propelled the Artemis II mission, carrying crew to the moon.

Commercial Airplanes generated $9.2 billion in revenue, up 13 percent, on the strength of higher delivery volume. The segment delivered 143 aircraft in the quarter, including 114 737s, 15 787s, 8 777s, and 6 767s. Despite the volume increase, the segment posted an operating loss of $563 million, marginally worse than the $537 million loss in Q1 2025, for an operating margin of negative 6.1 percent. The 737 program continues producing at 42 aircraft per month. The 737-10 entered the final phase of certification flight testing — Type Inspection Authorization 2 — during the quarter, with certification of both the 737-7 and 737-10 expected in 2026 and first deliveries anticipated in 2027. The 787 program stabilized production at eight per month, and the FAA certified an increased maximum takeoff weight for the 787-9 and 787-10 during the quarter. The 777X program received FAA approval to begin the Type Inspection Authorization 4a phase of certification flight testing, with first delivery of the 777-9 anticipated in 2027.

Global Services contributed $5.4 billion in revenue, up 6 percent, with operating earnings of $971 million and an 18.1 percent operating margin — the company’s strongest margin segment by a significant distance. During the quarter, Global Services secured what it described as the largest-ever Landing Gear Exchange Program agreement with Singapore Airlines Group and received initial FAA and EASA qualification for 777-9 training devices. Global Services ended the quarter with record backlog of $33 billion.

CEO Kelly Ortberg, who took the helm at Boeing amid the company’s prolonged recovery from its 737 MAX and labor crises, struck a measured but forward-leaning tone. “We’re building on our momentum with a strong start to the year and growing record-breaking backlog across our business,” Ortberg said, while noting the company’s continued focus on safety, quality, and production increases. The capital investment picture reflects that production push — additions to property, plant and equipment reached $1.275 billion in the quarter, more than double the $674 million invested in Q1 2025, with spending concentrated at Boeing’s Charleston, South Carolina, and St. Louis, Missouri facilities.

Defense deliveries in the quarter included 15 remanufactured AH-64 Apache attack helicopters, 4 KC-46 tankers, 2 new Apaches, 2 F/A-18 models, 2 MH-139 helicopters, 1 new CH-47 Chinook, 1 renewed Chinook, 1 F-15, 1 P-8, and 1 commercial satellite. The PAC-3 Seeker framework agreement stands out as the quarter’s most strategically significant defense development. PAC-3 is the hit-to-kill interceptor at the heart of the Patriot missile defense system — the same system defending critical infrastructure and military assets across multiple active conflict zones. A seven-year production expansion agreement signals that demand for that interceptor is not a short-term spike but a sustained requirement that Boeing and its partners are committing significant industrial capacity to meet.

Boeing is still losing money. That is the unchanged headline from a company that has been burning cash and posting losses for years through a combination of production crises, labor disputes, regulatory scrutiny, and the long shadow of the 737 MAX disasters. But the trajectory on nearly every metric — revenue, operating cash flow, free cash flow, backlog, defense profitability — moved in the right direction in Q1 2026. The question is whether that trajectory holds, and whether a $695 billion backlog can eventually pull the bottom line out of the red.