Boeing (BA) shares climbed Tuesday after the aerospace giant posted second-quarter results that showed real progress—even if the bottom line still needs work.

The company reported an adjusted loss of 76 cents per share, wider than the 30-cent loss analysts expected. But revenue rose 8% year over year to $24.56 billion, beating the $24.245 billion consensus estimate. On a GAAP basis, the net loss narrowed to $428 million from $612 million a year ago, and the diluted loss per share improved to 67 cents from 92 cents.

Operating earnings swung to a positive $156 million, compared with a $176 million loss in the same quarter last year. The operating margin improved to 0.6% from negative 0.8%. Core operating earnings—a metric Boeing emphasizes—came in at $1 million, a huge turnaround from a $433 million loss.

Commercial Airplanes: Deliveries Up, Losses Narrow

The commercial airplanes segment, Boeing's largest, saw revenue rise 8% to $11.75 billion as deliveries increased 14% to 171 aircraft. The segment's operating loss narrowed to $322 million, and its margin improved to negative 2.7% from negative 5.1%.

Boeing booked 246 net commercial orders during the quarter. The 737 program is transitioning production to 47 aircraft per month, and certification flight testing for the 737-7 and 737-10 is complete. The 777X also received FAA approval to begin certification flight testing—a key milestone for the long-delayed widebody.

Defense and Services: Mixed Results

Defense, Space & Security revenue rose 13% to $7.48 billion, but the segment's operating margin slipped to negative 0.2%, weighed down by $280 million in losses on the VC-25B program (the next Air Force One). Global Services revenue grew 1% to $5.34 billion, or 8% excluding the divested Digital Aviation Solutions business. Its operating margin dipped to 18.1% from 19.9%.

Cash Flow Turns Positive

Perhaps the most encouraging sign: Boeing generated $1.36 billion in operating cash flow and $631 million in free cash flow during the quarter. That's a stark contrast to recent years when cash burn was the norm. The company ended the quarter with $20 billion in cash and marketable securities, while debt fell to $45.9 billion.

Boeing's total backlog hit a record $715 billion, including more than 6,200 commercial airplanes. That backlog provides a multi-year production runway and gives investors confidence that demand remains strong.

Outlook: More Work Ahead

For full-year 2026, Boeing expects operating cash flow of about $5 billion to $7 billion and free cash flow of about $1 billion to $3 billion. That's a wide range, but the fact that Boeing is forecasting positive free cash flow at all is a big deal.

“Our operations are more stable and key certification programs remain on plan. Our focus has been on restoring trust and we are now building on that through a sustained focus on safety, quality, and on-time performance,” said Kelly Ortberg, Boeing's president and CEO. “While there is more work ahead in the second half of the year, the momentum we are building continues to move Boeing in the right direction.”

Boeing shares were trading up 1.48% at $214.62 at the time of publication Tuesday.