On September 3, The Wall Street Journal reported that The Boeing Company (NYSE:BA) has uncovered hundreds of millions of dollars in additional liabilities at Spirit AeroSystems beyond what it initially recognized after completing its $8.4 billion acquisition of the fuselage supplier in December 2025.
Spirit’s assumed liabilities now exceed identifiable assets by roughly $1.9 billion. It includes $1.52 billion tied to “off-market customer contracts,” agreements priced less favorably than current market terms that Boeing must now honor at a real economic loss. Because of acquisition accounting rules, these losses do not appear on Boeing’s income statement and instead sit in footnotes tied to the deal; the purchase price allocation remains provisional for up to a year after closing. Boeing bought back Spirit’s factories after having sold them in 2005 as part of an outsourcing strategy, reversing course following a string of safety failures, including two fatal 737 MAX crashes and the 2024 Alaska Airlines door-plug blowout on a plane whose fuselage Spirit built. Boeing’s stock has fallen by more than half since peaking in 2019.
Bull Case
The Boeing Company (NYSE:BA) delivered genuine operational improvement in the second quarter despite the Spirit liabilities. Revenue rose 8% to $24.56 billion, and free cash flow turned positive at $631 million for the first time in more than a year. Commercial deliveries also jumped by 14% to 171 aircraft. These results show that Boeing’s core operations are improving even as the company works through the costs of integrating Spirit.
Bringing Spirit in-house has also produced measurable quality improvements. New end-of-line inspections at the Wichita facility helped reduce fuselage defects by 45%, directly addressing manufacturing problems that contributed to the door-plug incident. Hence, Boeing can use the acquisition to gain greater control over production quality and reduce defects as it increases aircraft output.
Boeing also has a clear path toward higher production and cash generation. The 737 program reached a rate of 47 aircraft per month after Boeing activated a fourth assembly line in July. It put the company closer to its 52-per-month target. Boeing’s record $715 billion backlog provides substantial revenue visibility, while management maintained its full-year free cash flow guidance of $1 billion to $3 billion. It continues to target $10 billion in annual free cash flow over the longer term.
Bear Case
Spirit’s newly discovered liabilities still create a high economic cost for Boeing. The assumed liabilities exceeded identifiable assets by roughly $1.9 billion, including $1.52 billion in below-market contracts that Boeing must honor. Accounting rules may keep these losses out of the income statement for now. However, Boeing still faces the underlying financial burden.
The acquisition accounting also makes the deal’s true cost harder for investors to assess. The Boeing Company (NYSE:BA) must disclose these economic losses through acquisition-accounting adjustments and footnotes, while the purchase price allocation remains provisional. So more adjustments could emerge as Boeing completes its review, creating more uncertainty around the final cost of bringing Spirit back into the company.
Boeing still has a long way to go before it reaches sustained profitability. The firm posted a $428 million net loss in the second quarter. Its commercial airplanes segment recorded a negative 2.7% operating margin. Boeing also faces a separate $280 million charge on the Air Force One program linked to underestimated costs. It shows that execution problems are weighing on its financial recovery
Hedge Fund Data
Insider Monkey’s database shows The Boeing Company (NYSE:BA) was held by 90 hedge funds in the second quarter of 2026, down from 99 in the first quarter, with holdings value rising to $7.00 billion from $6.13 billion. RTX, a comparable aerospace and defense peer, was held by 92 funds, down from 95, with holdings value climbing to $10.37 billion from $9.42 billion. Both companies saw fund counts decline modestly this quarter even as dollar exposure to each grew.
Conclusion
Boeing’s operational turnaround looks increasingly tangible, with rising deliveries, positive free cash flow, and fewer fuselage defects, even as the Spirit acquisition uncovers costs that accounting rules keep out of the headline numbers. The firm has made progress on production, quality, and cash generation. But nearly $2 billion in newly discovered liabilities and losses in its commercial airplanes business show that Boeing still faces significant execution and financial risks. The key question now is whether Boeing has uncovered most of Spirit’s hidden costs or whether the integration will produce more negative surprises that could undermine the comeback.
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