Boeing (BA 1.09%) stock rose by as much as 8.7% in trading before 10 a.m. today. By 12:10 p.m. ET, the stock was up 5.5%. The move comes as investors cheered the company's first-quarter earnings report, which was released earlier. Frankly, the market had reason to be optimistic.
Boeing delivers
The aerospace and defense giant is one of the most fascinating stocks. Yes, it has plenty of near-term headwinds and exposure to risk around tariffs and the economy's overall direction. On the other hand, its well-regarded CEO, Kelly Ortberg, has a huge opportunity to engineer a turnaround at the company simply by executing well.
NYSE: BA
Key Data Points
As such, Boeing is almost a "self-help" story, and the good news from this earnings report is that the company seems to be starting to help itself. Boeing and Ortberg need to improve the delivery rate on their commercial airplanes, notably the narrow-body 737 MAX, and the profit margin at the Boeing Defense, Space & Security (BDS) business, notably on its troublesome fixed-price development programs.
First, management confirmed that the 737 and the wide-body 787 programs were on track. It expects to reach a monthly delivery rate of 38 and seven, respectively, by the end of the year. That confirms what Boeing supplier Hexcel's CEO, Tom Gentile, said recently, "Boeing is doing very well on their production. They're getting up in rate."
Second, the following chart speaks for itself. BDS generated a 2.5% operating profit margin in the quarter, and management plans to return to high single-digit margins over time.
Data source: Boeing presentations. Chart by the author.
Where next for Boeing
The company still faces risks, not least from tariff conflicts. Still, Boeing's demonstration of operational progress in the first quarter is a significant plus and gives confidence that Ortberg will turn the company around.
