For earnings season, the Horizon will be summarizing financial results of each Horizon 7 company (Boeing, Booz Allen, General Dynamics, Leidos, Lockheed Martin, Northrop Grumman, and RTX Corporation). We begin with Boeing and GD.

Boeing revenue beats estimates for Q1 2025

Boeing’s Q1 2025 earnings reflect a complicated but improving outlook. Total revenue rose to $19.5 billion, up from $16.6 billion in Q1 2024, driven by a major surge in commercial aircraft deliveries. However, the company still posted a net loss attributable to common shareholders of $123 million (or $0.16 per share), largely due to ongoing fixed-price contract losses and elevated interest expenses. Still, Wall Street had expected worse, and investors were encouraged by the narrowing of losses and improved cash flow.

• Surprise surge in commercial airplane revenue: Boeing’s Commercial Airplanes segment brought in $8.15 billion, up 75 percent year-over-year—an unexpected boost reflecting a rebound in production and delivery of 737 and 787 jets.
• Massive losses on fixed-price defense programs: Boeing recorded over $4.6 billion in cumulative reach-forward losses since inception across programs like the KC-46A, T-7A Red Hawk, and MQ-25. In Q1 alone, revised estimates added $151 million to operating losses from long-term contracts.
• Spirit AeroSystems merger in the spotlight: The pending $4.7 billion all-stock acquisition of Spirit AeroSystems was delayed but is now projected to close by 30 June 2025, following shareholder approval and regulatory extensions. It’s a pivotal play for supply chain control, particularly in fuselage manufacturing.

Looking ahead: Expect further cash burn moderation, after narrowing from $3.36 billion in Q1 2024 to $1.62 billion in Q1 2025. Commercial aircraft deliveries are likely to rise, with healthy demand signaled by increased unbilled receivables, meanwhile defense losses to remain under scrutiny, especially fixed-price contracts that continue to carry financial risk.

General Dynamics surpasses $12 billion in quarterly revenue with gains across all segments

General Dynamics (GD) reported strong Q1 2025 earnings, driven by across-the-board gains in each of its four business segments. Revenue reached $12.2 billion, up nearly 14 percent from Q1 2024, while net earnings surged to $994 million. The company posted an operating margin of 10.4 percent, boosted by a robust 45 percent revenue increase in its Aerospace segment, signaling rising demand for Gulfstream jets. Operating earnings rose 22 percent year-over-year, reflecting strength not just in aviation but also submarine programs and technology contracts.

• Gulfstream G700 drives aerospace turnaround: Deliveries of the new ultra-long-range G700 fueled a 50 percent increase in aircraft deliveries and a 69 percent rise in Aerospace segment operating profit, signaling a full post-certification recovery in business aviation.
• Record revenue in marine systems: Submarine-related construction revenue rose due to higher volume on the Virginia- and Columbia-class programs, contributing to a $258 million revenue gain in the segment despite federal spending constraints.
• $9.1 Billion in unbilled receivables: GD’s ballooning contract assets reflect intense ongoing production—particularly in Aerospace and Combat Systems—underscoring how much revenue is still waiting to be billed and realized as cash.

Looking ahead: Watch for first G800 deliveries now that FAA and EASA certification is secured—expected to boost Aerospace revenue even further. GD’s operating margin is likely to hold near 10 percent, with Technologies and Aerospace continuing to lead. Marine Systems will remain in focus as welding-related cost risks on the Navy submarine programs remain under close scrutiny. Also, DOGE.