Boeing Defense reports earnings growth for Q1

Boeing Defense, Space and Security has generated $6.29 billion (€5.89/£5.03 billion) in revenue in the first quarter of 2025 and $155 million (€145.1/£124.0 million) in earnings according to the company’s Q1 report that was released on the 23rd April. 

The company’s defence segment has returned slightly lower revenue than the same period for 2024, which saw $6.95 billion (€6.51/£5.56 billion) in revenue, representing a 9% fall. However, the company’s earnings increased marginally from $151 million (€141.4/£120.8 million) in 2024 to $155 million this year, which is a 3% increase with a 2.5% operating margin. This means that Boeing Defense earnt 2.5 cents in operating profit for every dollar of revenue it earned. The operating margin indicates that the company’s operational performance is stabilising, the press release states. 

In addition, the defense and space sector has a $62 billion (€58.1/£49.6 billion) backlog, 29% of which is from customers outside of the US. It is worth noting that Boeing was the fourth-largest contractor to the US DoD in 2023, with $20.1 billion in defence contracts awarded that year. Its performance and challenges with labour issues – there was a machinist strike in 2024 that reportedly cost $2 billion (€1.87/£1.6 billion) – and cash flow issues which led to the company selling some stock and debt to raise $25 billion (€23.4/£20 billion) and shore up its finances. 

Boeing also decided to sell some of its navigation business assets to software investment firm Thoma Bravo on the 22nd April, raising another $10.55 billion (€9.88/£8.44 billion) to help offset its debt. “This transaction is an important component of our strategy to focus on core businesses, supplement the balance sheet and prioritize the investment grade credit rating,” said Kelly Ortberg, Boeing president and chief executive officer.

The Q1 return also notes that the backlog does not include the order for the F-47 next generation fighter, for which it was selected in March. This is because the order is “pending completion of the source selection and evaluation review process,” the press release states. 

In terms of deliveries, the company’s primary output for 2025 was the Apache helicopter, with four new aircraft and 11 refurbished delivered so far. The next most significant in quantity was the F/A-18 model aircraft. The total number of aircraft delivered so far in Q1 is 26, compared with 14 for the prior year. 

The AH-64 Apache remains popular with Poland signing a lease agreement in February for eight AH-64Ds to see the country through until delivery of its newbuild helicopters in 2028 and deliveries are also expected for India. This is despite the apparent vulnerability of helicopters on the Ukrainian battlefield. 

Calibre comment

Boeing struggled with its defence business in 2024, alongside the widely reported challenges for its commercial business. The company has won several fixed price contracts, which is where the US government sets the price and Boeing’s profits depend upon its performance. This includes programmes like the KC-46 tanker and MQ-25 carrier-based UAV. However, the company reportedly lost $2 billion from these contracts in 2024, and its overall performance has prompted concern from US Congress given its prominent role across so many key programmes from space to missile defence. 

By Sam Cranny-Evans, published on 23rd April, 2025.