Should Boeing Stock Investors Worry About Its Money-Losing Jet Business?
If you own Boeing (BA), the worry is whether its commercial airplane business can earn money on the jets it sells. In the second quarter of fiscal 2026, that business lost money. Its operating margin was negative 2.7%, meaning costs ran above sales. The jet business brought in nearly half of Boeing’s revenue for the quarter. That makes its margin the number that matters most for Boeing’s profits.
Boeing Has Explained Why Its Jet Margins Are So Low
The loss is getting smaller. Management said the margin improved from a year earlier because Boeing delivered more planes and sold a better mix of them. It delivered 171 airplanes in the quarter. That was its highest quarterly total since 2018. The quarter also got help from other favorable adjustments of about 1.5 percentage points. Without them, the margin would have been worse.
The deeper problem is price. Management said cash margins on the MAX and the Dreamliner sit at depressed levels, slightly above breakeven. It said this is largely due to pricing drags that take time to fully dissipate.
Boeing as a whole shows how far margins have to go. Its overall operating margin over the last twelve months was negative 5.4%. That is better than negative 12.4% a year earlier. But it is far below the company’s 11.7% high of the past ten years. Management wants margins on the MAX to return close to their 2018 level by the end of the decade. The open question is whether the factories can get there.
Holders Do Not Know Yet If Boeing’s Factories Will Keep Up
Recent news has not helped. In September, management said stabilizing MAX production is taking longer than expected. The target is a MAX production rate of 47 jets a month. Across all its models, Boeing delivered 51 jets in August. That was down from 57 a year earlier, as Dreamliner handovers declined. Management also said engine deliveries for the Dreamliner fell behind in the first half of the year.
There is real evidence on the other side. The commercial airplane backlog stands at a record $597 billion. That order book includes over 6,200 airplanes. Management expects margins to improve as higher output spreads fixed costs over more planes. It also expects later deliveries from the backlog to carry better prices. Korean Air finalized an order for 103 Boeing aircraft in September. The engineers’ union also reached a tentative contract agreement.
How Much Your Boeing Position Could Lose
In the 2022 inflation shock, Boeing fell 44% from peak to trough. The S&P 500 fell 24% in the same shock. In the 2025 tariff shock, Boeing fell 27%. The index fell 19% that time. When markets turn, this stock has fallen harder than the index. Picture a $10,000 position. A fall as deep as 2022’s would leave it worth about $5,600.
The stock also does not look priced for trouble. Boeing trades at 65.3 times its net profit of the last twelve months, even though its operations lost money over that period. The S&P 500 trades at 22.5 times. That price-to-earnings ratio compares the share price with a year of profit per share. Boeing’s ratio sits near the top of its own ten-year range. The price likely assumes the margin repair arrives on schedule.
A holder should be moderately worried, not alarmed. The worry eases only if MAX output settles at its target rate. Dreamliner deliveries also need to recover. Another slip in either would make the low margin harder to fix. The next dated event is the engineers’ contract, which expires in October.
How To Act On BA?
Play Offense
Learn more about BA | Identify catalysts | Generate income against BA stock
Play Defense
Trim your BA position | Tax-friendly unwind of BA | Opt for High Quality Portfolio