SEATTLE — Boeing will feel the impact of hefty tariffs imposed by President Donald Trump — particularly when it comes to deliveries to China — but the company's strong first quarter has set it up to continue its recovery, Boeing executives said Wednesday.

Boeing lost significantly less money in the first three months of this year than the same time period last year, when it was still reeling from a panel blowing off a 737 Max 9 plane. That January 2024 blowout briefly grounded its Max 9 fleet and slowed production in its factories to a crawl.

In the first three months of 2024, Boeing lost $355 million, or 56 cents per share. In the same time period this year, Boeing lost $31 million, or 16 cents per share, according to financial results released Wednesday.

It reported $19.5 billion in revenue for the quarter, an 18% increase from the same time period last year. Boeing burned through $2.3 billion in cash in the first quarter this year, compared to $4 billion in the same time period a year ago.

Since the blowout, Boeing has worked to improve its manufacturing process, change its company culture and reshape its portfolio to focus on the core areas of its business. On Wednesday, CEO Kelly Ortberg said that recovery plan is in "full swing."

"We can't claim victory, ... but our plan seems to be working," Ortberg told financial analysts on a call Wednesday.

Even the tariffs, which threaten to increase manufacturing costs, disrupt the aerospace supply chain and cut off potential markets for delivering planes, won't disrupt that progress, Ortberg continued.

The effect of tariffs

Boeing said it faces two potential buckets of tariff-related impacts: increased manufacturing costs and retaliatory tariffs from other countries as it delivers planes, particularly in China.

So far, the effect of tariffs on manufacturing costs has been "immaterial," Ortberg said Wednesday. Most of its supply chain is based in the United States.

Boeing is paying a 10% tariff on imports from suppliers in Japan and Italy. But it expects to get some portion of that money back thanks to something called the drawback provision, which allows companies to recover tariffs paid on imports that are then exported.

Boeing's suppliers, which deliver its products to Boeing, can't benefit from that, but the company is looking at whether suppliers can "piggyback" on Boeing's drawback provision, Ortberg said, adding that the company is working to make sure an argument over who pays the 10% tariff "doesn't turn into a continuity of supply issue."

When it comes to the second bucket, "the only region where we have an issue with aircraft delivery today is China," Ortberg said, confirming reports that many of its customers in China have indicated they will not take deliveries because of the tariffs.

Boeing had 50 deliveries slated for China this year, including nine for planes that are not yet in production. It will not continue to build aircraft for customers who will not take them, Ortberg said.

Now, Boeing is assessing its options to remarket those planes that were headed to China to other customers.

Ortberg said he expects the disruption in China "will take away some of the headroom we felt with our strong first quarter deliveries," but he was adamant that the company will do its best to "keep the China situation from impacting our production flow."

Boeing talks nearly every day with the federal administration, up to the president himself, about the impact of tariffs on the aerospace industry and the hope for some relief, Boeing executives said Wednesday.

"We're spending a lot of time making sure the administration understands the implications of either short-term or long-term tariffs on not just our company but the aviation industry in the U.S.," Ortberg said. "They understand. They know this is extremely important to our trade, to the trade balance."

"If we see markets closing, that's going to be a big challenge for us," Ortberg continued. "I'm very hopeful we get to some negotiated agreements here and that we can move forward."

737 Max production

Boeing is still held to a production cap of 38 Max planes per month, a threshold put in place by the Federal Aviation Administration following the panel blowout in 2024, but executives said again Wednesday that the company is on track to request permission to move beyond that rate this year.

Once it gets the green light to increase production, Ortberg said it will focus on increasing the rate in increments of five — moving from 38 planes per month to 43 and so on.

He expects it will take roughly six months between each rate increase, and said Boeing will follow the same process of reviewing internal metrics with the FAA before attempting to increase the rate.

Boeing also expects to increase the production rate of its 787 plane in Charleston, South Carolina, from five per month to seven this year. It is still facing challenges with shortages of airline seats, which Ortberg predicts will last through the year.

The company is also working to certify its 737 Max 7 and Max 10 planes, with no new updates to report after the first quarter this year.

Meanwhile, it moved one step forward in certification for its 777X plane, receiving authorization from the FAA to expand its flight-testing capabilities, and anticipates first delivery in 2026. Boeing launched the 777X in 2013 and first flew the plane in 2020, but certification by the FAA has been repeatedly delayed, including by manufacturing defects that held up the plane last year.

Boeing's commercial airplanes division reported $8 billion in revenue, up 70% from the same time period last year, when it reported $4.7 billion.

The commercial division delivered 130 planes this quarter, a 57% increase from the 83 planes delivered in the first quarter of 2024.

A defense contract and a divestiture

On the defense side, Boeing reported $6.3 billion in revenue, a 9% decrease from the $6.9 billion recorded in the first quarter of 2024.

That's a significant boost compared to the last quarter of the year, which saw the defense business lose $2.3 billion and report $1.7 billion in write-offs from costly fixed-price contracts. This quarter, Boeing did not report any write-offs in its defense or commercial business.

In March, Boeing won a contract to build the U.S. Air Force's future fighter jet, known as Next Generation Air Dominance, or NGAD. Beating out Lockheed Martin, that contract will "secure our fighter franchise for decades to come," Ortberg said.

Boeing's defense, space and security business had a $62 billion backlog at the end of the first quarter. About 29% of those orders are for customers from outside the United States.

Its commercial airplanes division had a backlog of 5,600 airplanes valued at $460 billion.

Boeing's global service division remained stable year over year, reporting $5 billion in revenue for the first quarter this year and in 2024.

On Tuesday, Boeing announced it would sell a chunk of that division — including its flight navigation system Jeppesen and other digital assets to private equity firm Thoma Bravo in a $10.6 billion deal. That sale was part of Ortberg's stated goal to focus only on the core areas of the business and look for ways to reshape the company's portfolio.

The company is still considering further divestitures, Ortberg said Wednesday, though he expects Tuesday's sale will be the largest.

That cash infusion, as well as a $21 billion stock sale in October and the "better than expected" delivery rate in the first quarter this year, put less strain on the company's finances this quarter, Ortberg said, putting Boeing on "solid footing."

Boeing's debt remained largely unchanged at $53 billion at the end of the first quarter this year and last year.

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