It's been about a week now since Boeing (BA -1.79%) reported its Q4 earnings, and... so far, so good.

Although Boeing's earnings report was objectively disappointing, with losses more than three times the amount that Wall Street had forecast, Boeing shares perked up on hopes that the worst news may now be in the rearview mirror. Last week, Boeing shares continued to move higher in fits and starts, finally closing Thursday about $10 above their pre-earnings price.

But are investors right to be so optimistic about Boeing?

Boeing's Q4 earnings

To an extent, it depends on how you look at the numbers. Boeing reported $5.46 per share in GAAP net losses in Q4, and losses of $18.36 for the year. The company also continued to burn cash, with negative free cash flow of $4.1 billion for the quarter and $14.3 billion for all of 2024, an amount even greater than its reported full-year net loss of $11.8 billion.

Boeing blamed the bulk of the quarter's (and the year's) losses on "previously announced impacts of the IAM work stoppage and agreement," as well as on "costs associated with workforce reductions" that were in part brought on by the IAM strike.

Now, the good news is that, with the signing of a new labor contract, this strike is now behind Boeing. But the bad news is that not all of Boeing's losses were due to labor unrest, which is largely outside of Boeing's control. Some were directly caused by poor business decisions on Boeing's part.

Take the company's vaunted Boeing Defense, Space & Security business, or BDS. Boeing admitted that "charges for certain defense programs" contributed to the losses it incurred in both the quarter and the year. And indeed, while the strike cost Boeing's Commercial Airplanes division $2.1 billion in losses last quarter, BDS suffered even more losses -- $2.3 billion.

BDS took charges for the company's KC-46A refueling tanker program and for its T-7A training jet program, two programs where Boeing may have underbid to win work from the Pentagon -- and is now paying the price in the form of "fixed price development cost pressures" causing losses. Boeing also took charges on its VC-25B "Air Force One" program, and on its MQ-25 Stingray drones program as well. And Boeing took charges on its Commercial Crew program, which refers to Boeing's troubled Starliner space capsule that just can't seem to reach the International Space Station without glitching one way or another.

In fact, about the only part of Boeing that is "flying right" these days is the company's Global Services aircraft maintenance business. Problem is, even that program only grew revenues 6% in Q4, and 4% for all of 2024. (On the plus side, Boeing did manage to expand margins nicely in the Global Services business. The operating profit margin there averaged 18.1% over the course of the year, and achieved a stellar 19.5% margin in Q4.)

Image source: Getty Images.

Some good news for Boeing

Circling back to Commercial Airplanes, which seems to be the unit investors are most focused on right now, Boeing did have some good news to report. With the IAM strike out of the way, Boeing is "executing a methodical plan to restart our factories."

Management confirmed in its post-earnings conference call with analysts that it has sufficient parts in inventory to sustain production of its 737 MAX airliners at a rate of 38 planes per month, up from 33 planes in January. And it sees a path to accelerate production beyond that rate. CEO Kelly Ortberg says the supply chain for Boeing's 787 airliners, too, is "stable" and the company is anticipating a production rate increase there as well.

That's good to hear. At the same time, though, I don't think investors should over-fixate on Boeing's commercial business and ignore the problems at BDS.

In case you missed it...

Unemphasized in the official earnings report, but disclosed in the conference call, Boeing warned that one unwanted effect of the massive charges taken at BDS in Q4 is that the costs Boeing has incurred will show up in the form of decreased cash flow "in the next few years." Free cash flow will almost certainly be negative in 2025, for example. And CFO Brian West even warned these charges could spread "over the coming decade."

So while Boeing insists that "demand for our defense products remains very strong," this doesn't necessarily imply that BDS profits will be particularly strong -- or even positive -- going forward.

When you consider that BDS currently makes up more than $1 out of every $3 in revenue Boeing collects, I can't help but think this is bad news for Boeing's business going forward, and for Boeing stock as well.