**BETA FINCH PODCAST SCRIPT**

---

ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown where we decode the numbers that move markets. I'm Alex, and joining me as always is Jordan. Today we're diving into UPS's Q4 2025 earnings call - and wow, there's a lot to unpack here.

But before we get started, I need to share an important disclaimer: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

Jordan, this was quite the call. UPS is in the middle of what they're calling their "Amazon accelerated glide down" - essentially deliberately shrinking their network while trying to improve profitability. How'd they do in Q4?

JORDAN: Alex, the headline numbers actually look pretty solid considering they're in the middle of this massive transformation. Q4 revenue came in at $24.5 billion with operating profit of $2.9 billion - that's an 11.8% operating margin. For the full year 2025, they hit $88.7 billion in revenue with $8.7 billion in operating profit.

But here's what's really interesting - they exceeded their own internal expectations despite deliberately reducing Amazon volume by about 1 million pieces per day. That tells you something about the quality improvements they're seeing.

ALEX: Right, and that's the key theme here - this isn't just about getting smaller, it's about getting more profitable per package. What stood out to you in terms of revenue quality improvements?

JORDAN: The numbers are actually quite impressive. U.S. revenue per piece grew 7.1% year-over-year, and in Q4 specifically it jumped 8.3% - that's their strongest fourth quarter revenue per piece growth in four years. They're also seeing their customer mix improve dramatically. Small and medium business penetration hit 31.8% of total volume, and B2B grew to 42.3% - both record highs.

CEO Carol Tomé made a point of saying this isn't a "shrink-the-company strategy" but rather growing in the best parts of the market. They're essentially trading low-margin Amazon volume for higher-margin enterprise and SMB business.

ALEX: Let's talk about the costs though, because this transformation isn't free. They took some pretty significant charges this quarter, right?

JORDAN: Absolutely. They took a $137 million after-tax write-off for their MD-11 aircraft fleet - they're accelerating the retirement of these older, less efficient planes and replacing them with newer Boeing 767s. CFO Brian Dykes mentioned they had about $50 million in incremental lease costs in Q4 just to replace that capacity, and that'll roughly double in 2026.

They also delivered $3.5 billion in savings from network reconfiguration - they closed 93 buildings in the U.S., removed 26.9 million labor hours, and cut 48,000 positions. It's a massive operational overhaul.

ALEX: Now, one of the most interesting developments was around their economy product called "Groundsaver." They're basically handing some of that delivery back to the U.S. Postal Service. What's the story there?

JORDAN: This is actually a reversal of something they did previously. UPS had been doing more of this economy delivery in-house, which was costing them big - we're talking about $400-500 million in headwinds in 2025. Now they're going back to having USPS handle the final mile for some of these packages, which should improve their economics significantly.

Brian Dykes said they expect to see benefits start materializing in the second half of 2026, though the full benefit might not come until 2027. They're using what they call "density matching technology" to decide which packages UPS delivers versus which ones go to USPS.

ALEX: Let's talk guidance because 2026 sounds like it's going to be a tale of two halves. What are they expecting?

JORDAN: Exactly right, Alex. For full year 2026, they're guiding to about $89.7 billi

This episode includes AI-generated content.

**Beta Finch Podcast Script: RTX Q4 2025 Earnings**

---

**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we decode corporate calls so you don't have to. I'm Alex.

**JORDAN:** And I'm Jordan. Today we're diving into RTX's fourth quarter 2025 results - and wow, what a call this was.

**ALEX:** Before we jump in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Absolutely. Now Alex, RTX just delivered some seriously impressive numbers. Walk us through the highlights.

**ALEX:** The numbers are pretty staggering, Jordan. Full year adjusted sales hit $88.6 billion - that's up $9 billion year-over-year, or 11% organic growth. But here's what really caught my eye: their backlog reached a record $268 billion. That's up 23% from last year.

**JORDAN:** A quarter of a trillion dollars in backlog - that's just mind-boggling. And their free cash flow performance was equally impressive, right?

**ALEX:** Exactly. Free cash flow came in at $7.9 billion for the year, up $3.4 billion from 2024. CEO Chris Calio seemed pretty confident about their momentum, pointing to what he called "durable demand" across both commercial and defense segments.

**JORDAN:** Speaking of segments, let's break down where this growth is coming from. Commercial OE was up 10%, commercial aftermarket up 18%, and defense up 8%. But I think the real story here is what's happening with their defense business, especially given the current geopolitical environment.

**ALEX:** That's a great point. Raytheon, their defense segment, had some massive contract wins. They booked $1.2 billion to supply Spain with Patriot air defense systems, another $1.2 billion for Tamir missile production, and get this - their international backlog mix is now 47%, up from 44% last year.

**JORDAN:** And the timing couldn't be better. Calio mentioned that NATO allies are committed to increasing defense spending from 2% of GDP to 3.5% by 2035. That's a huge tailwind for companies like RTX.

**ALEX:** But let's not forget about the elephant in the room - the GTF engine issues that have been plaguing Pratt & Whitney. How are they handling that?

**JORDAN:** Actually, this was one of the more encouraging parts of the call. They reported that aircraft on ground - that's AOGs - declined in Q4 and are down over 20% from 2025 highs. Their maintenance and repair output was up 39% in the fourth quarter alone.

**ALEX:** That's a significant improvement. And they're expecting similar MRO growth rates in 2026. Plus, they got EU certification for their GTF Advantage engine and expect aircraft certification soon.

**JORDAN:** Now let's talk guidance, because this is where things get really interesting for 2026. They're projecting sales between $92-93 billion, which represents 5-6% organic growth.

**ALEX:** And EPS guidance of $6.60 to $6.80 - that's solid growth on top of their $6.29 in 2025. But what really stood out to me was their free cash flow guidance of $8.25 to $8.75 billion. They're basically saying they can maintain this cash generation machine while investing heavily in capacity.

**JORDAN:** Speaking of investments, they're planning to spend $10.5 billion in CapEx and R&D in 2026, including $3.1 billion in CapEx alone. That's a $500 million increase from last year. They're really betting big on future demand.

**ALEX:** And then we got to the Q&A section, which was fascinating. There were some pointed questions about the new administration's defense policies and expectations for contractors.

**JORDAN:** Right, CEO Calio was pretty diplomatic but direct. He acknowledged the "frustration" from the Department of Defense about production rates and said RTX is "fully aligned" with ramping production faster. But he also defended their d

This episode includes AI-generated content.

**BETA FINCH PODCAST SCRIPT**

---

**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we turn quarterly calls into coffee-shop conversations. I'm Alex, and I'm here with my co-host Jordan to break down 3M's Q4 2025 earnings call that just wrapped up. Jordan, this was one of those calls where the CEO really wanted to drive home that the turnaround is working.

**JORDAN:** Absolutely, Alex. And before we dive in, let me quickly mention - this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**ALEX:** Thanks for that reminder. Now, let's get into the numbers because 3M delivered some solid results here. Organic growth of 2.2% in Q4, operating margin of 21.1%, and earnings per share came in at $1.83. But the real story is the full-year performance - they grew organic sales 2.1% for the year, which is a nice acceleration from that 1.2% they posted in 2024.

**JORDAN:** What really caught my attention was the margin expansion story. They delivered 23.4% adjusted operating margin for the full year - that's up 200 basis points year-over-year and at the high end of their guidance. CEO Bill Brown has been hammering this "commercial excellence" message for the past 21 months, and it seems like it's actually working.

**ALEX:** Yeah, and let's talk about innovation because this is where things get interesting. They launched 284 new products in 2025 - that's up 68% from the prior year. Brown was pretty excited about this, saying sales from products launched in the last five years were up 23% for the full year.

**JORDAN:** That's a key metric to watch, Alex. They call it their "new product vitality index" or NPVI, and it hit 13% - about two points above where they started the year. But here's what I found fascinating - Brown said about 80% of their R&D spending is now focused on what they call "priority verticals" - the higher-growth, higher-margin areas.

**ALEX:** Right, and speaking of those priority verticals, they represent about 60% of the business now. Brown hinted that there's going to be some portfolio reshuffling ahead. He mentioned about 10% of their business is in more commodity-like areas that they're probably going to think about exiting over time.

**JORDAN:** The operational metrics were impressive too. Their OTIF - that's on-time, in-full delivery - hit 90%, up 300 basis points from the prior year. Brown called it "the best we've achieved in decades" and they sustained that rate for seven months straight. That's the kind of operational excellence that actually moves the needle with customers.

**ALEX:** Now let's talk guidance because this is where it gets really interesting for investors. For 2026, they're calling for organic sales growth of approximately 3% - so accelerating from that 2.1% they just posted. They expect adjusted operating margin expansion of 70 to 80 basis points, and EPS of $8.50 to $8.70.

**JORDAN:** What I like about this guidance is the confidence in their "outgrowth" strategy. Brown said they expect the macro environment to be around 1.7% growth, but they're guiding to 3% organic growth. That delta - over $300 million - is what he calls outperforming the macro, and about half of that is coming from new product introductions.

**ALEX:** The Q&A had some interesting moments too. There were several questions about tariffs, which makes sense given the current political environment. Brown said they're already dealing with about $140 million in gross tariff impact, and there could be additional headwinds if new Europe tariffs get implemented.

**JORDAN:** Yeah, Brown was pretty measured on that topic. He said if the proposed Europe tariffs play out as discussed - 10% initially, then up to 25% - it could be a $30 to $40 million impact in 2026. But he emphasized that's not in their gui

This episode includes AI-generated content.

**BETA FINCH PODCAST SCRIPT**

---

**ALEX**: Welcome back to Beta Finch, your AI-powered earnings breakdown. I'm Alex, and I'm here with Jordan to dive into Illinois Tool Works' latest earnings call. Jordan, ITW just delivered what looks like a solid finish to 2025 and some pretty optimistic guidance for 2026.

**JORDAN**: Absolutely, Alex. But before we get into the numbers, let me remind our listeners that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**ALEX**: Thanks for that important reminder. Now, let's talk ITW. The industrial conglomerate posted some impressive results - Q4 revenue growth of over 4%, with organic growth of 1.3%, and a 7% increase in GAAP EPS to $2.72. But what really caught my eye was their operating margin hitting record levels at 26.5%.

**JORDAN**: Those margins are eye-popping, Alex. What's driving that performance is their "enterprise initiatives" - basically their continuous improvement programs - which contributed 140 basis points to margins in Q4 alone. And here's the kicker: they're projecting another 100 basis points of margin improvement in 2026 from these same initiatives.

**ALEX**: That's massive. Let's talk about their guidance for 2026. They're projecting organic growth of 1% to 3%, total revenue growth of 2% to 4%, and EPS growth of 7% at the midpoint of $11.20. Jordan, what's your take on these numbers?

**JORDAN**: What strikes me is the quality of this guidance, Alex. CEO Chris O'Herlihy emphasized that their incremental margins are running in the "mid to high forties" - that's well above their historical 35-40% range. CFO Michael Larsen explained this isn't just about getting lucky with market conditions. They've fundamentally improved their portfolio quality through years of what they call "PLS" - product line simplification - essentially pruning weaker products and focusing on their best performers.

**ALEX**: Speaking of focus, let's dive into their Customer-Backed Innovation, or CBI initiative. This seems to be a real growth driver for them.

**JORDAN**: CBI is fascinating, Alex. They achieved 2.4% revenue growth from customer-backed innovation in 2025 - that's a 40 basis point improvement year-over-year. But here's what's really interesting: their patent filings increased 18% in 2024 and another 9% in 2025. O'Herlihy called this a "leading indicator" because their patents typically protect customer solutions, suggesting future revenue growth is in the pipeline.

**ALEX**: And they're targeting 3% plus CBI contribution by 2030. That's become so important to their strategy that they've actually added it to their executive compensation plans. Now, during the Q&A, there were some interesting questions about specific segments. What stood out to you?

**JORDAN**: The semiconductor discussion was compelling. Their test and measurement segment saw semis up mid-single digits in Q4 after what had been a challenging year. Andy Kaplowitz from Citi asked about whether this was sustainable, given they'd seen "head fakes" before. O'Herlihy was cautiously optimistic - semis represent about 15% of their test and measurement business, or roughly 3% of total ITW. He emphasized they're well-positioned to take market share as that sector recovers.

**ALEX**: The China story is also worth highlighting. They grew 9% there for the full year, with automotive OEM up 12%. That's largely driven by their success in the EV market, where they've made significant investments over recent years.

**JORDAN**: Exactly. China represents about 65% of worldwide EV builds, and ITW has positioned themselves well with Chinese OEMs, who now represent 70% of that market. They're expecting mid to high single-digit growth in China for 2026, which shows how their strategic investments are paying off.

**ALEX**: One

This episode includes AI-generated content.

**BETA FINCH PODCAST SCRIPT**

---

ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown where we turn quarterly reports into conversations that actually make sense. I'm Alex.

JORDAN: And I'm Jordan. Before we dive in, this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

ALEX: Today we're breaking down Honeywell's Q4 2025 earnings call, and wow - there's a lot happening at this industrial giant. Jordan, where do we even start with this one?

JORDAN: Alex, this is probably one of the busiest transformation stories we've covered. Honeywell is essentially splitting itself into three separate companies while posting some pretty impressive numbers. Let's start with the financial highlights because they're actually quite strong.

ALEX: Right, so Q4 revenue grew 11% organically, or 6% if you exclude this Bombardier agreement impact they keep mentioning. What really caught my attention was their orders growth - up 23% in the quarter. That's huge for an industrial company.

JORDAN: Exactly, and that massive order growth pushed their backlog to over $37 billion, which is a new record. CEO Vimal Kapur seemed pretty excited about this, calling it validation of their market positions. But here's what I find interesting - they're guiding for 2026 organic sales growth of just 3% to 6%. That seems conservative given the order strength, doesn't it?

ALEX: It does feel conservative, but I think management is being cautious about the macro environment. They're seeing some weakness in Europe and China, particularly in their industrial automation business. CFO Mike Stepniak mentioned that different regions are performing very differently - the US and Middle East are strong, but Europe is just "okay."

JORDAN: And speaking of regional differences, let's talk about their pricing power. Honeywell has been capturing about 4% price increases, which is well above their historical 1-2% range. Kapur explained this isn't just tariff pass-throughs - they're seeing persistent inflation in labor costs, electronics, and commodities that's forcing a more mature pricing strategy.

ALEX: That's a key point because sustainable pricing power often separates great industrial companies from average ones. Now, Jordan, let's dive into this massive portfolio transformation they're executing. Can you walk our listeners through what's happening?

JORDAN: Sure. So Honeywell is essentially breaking itself apart. They already spun off their Advanced Materials business in October - that's now trading as Solstice. Next up, they're spinning off Aerospace in Q3 2026, which is actually ahead of their original timeline. They've already named the leadership team for that spin-off.

ALEX: And they're not stopping there. They announced they're selling their Productivity Solutions and Services business plus their Warehouse and Workflow Solutions. Kapur said they expect to sign deals in Q2. What's the strategic logic here?

JORDAN: It's all about focus and growth rates, Alex. By shedding these businesses, Honeywell is essentially choosing to exit the transportation, logistics, and warehouse markets to concentrate on three core areas: process automation, buildings, and industrial sensing. The remaining industrial automation business becomes much simpler - basically a sensing and measurement company.

ALEX: That makes sense. Sometimes less really is more in the corporate world. Now, there was some interesting discussion about their quantum computing venture, Quantinuum. This isn't your typical industrial business unit.

JORDAN: Not at all! Quantinuum just raised $840 million at a $10 billion valuation and launched something called Helios, which they claim is the world's most accurate commercial quantum computer. Honeywell is investing about $100 million more in 2026 than they

This episode includes AI-generated content.

**BETA FINCH PODCAST SCRIPT**

---

**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we turn corporate earnings calls into conversations that actually make sense. I'm Alex.

**JORDAN:** And I'm Jordan. Today we're diving into GE Aerospace's Q4 2025 earnings call, and wow - this was one impressive quarter to close out the year.

**ALEX:** Before we get started, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Absolutely. Now Alex, let's talk about these numbers because GE Aerospace just delivered what CEO Larry Culp called "an outstanding year." We're looking at some seriously impressive double-digit growth across the board.

**ALEX:** The headline numbers are pretty striking, Jordan. For Q4, orders were up 74% - that's massive. Revenue increased 20%, earnings per share jumped 19% to $1.57, and free cash flow grew 15%. But the full-year picture is even more compelling.

**JORDAN:** Right, and that's where it gets really interesting. Full-year orders up 32%, revenue up 21%, and here's the kicker - operating profit grew by $1.8 billion dollars. That's not a percentage, that's $1.8 billion in absolute dollars. Free cash flow was up $1.5 billion to $7.7 billion total.

**ALEX:** What I found fascinating was how CEO Larry Culp framed this. He kept coming back to their purpose statement: "We invent the future of flight, lift people up, and bring them home safely." But then he backed that up with some hard data - nearly one million people are in flight right now with GE technology under wing.

**JORDAN:** And let's talk about that backlog, Alex. They're sitting on roughly $190 billion in backlog, up nearly $20 billion over the last year. That's not just a number - that's visibility into future revenue streams. When you have that kind of contracted future business, it gives you incredible confidence in your guidance.

**ALEX:** Speaking of guidance, let's break down what they're expecting for 2026. They're forecasting low double-digit revenue growth, with commercial services up mid-teens. Operating profit is expected to hit $9.85 to $10.25 billion - that's up a billion dollars at the midpoint.

**JORDAN:** And here's what caught my attention - CFO Rahul Ghai said they expect to hit that $10 billion operating profit milestone in 2026, which is two years earlier than their original outlook. That's not just meeting expectations, that's accelerating past them.

**ALEX:** The EPS guidance of $7.10 to $7.40 represents nearly 15% growth at the midpoint. And free cash flow? They're projecting $8 to $8.4 billion. Jordan, when you look at these numbers, what's really driving this performance?

**JORDAN:** It's really a tale of two segments, Alex. Their Commercial Engines & Services segment is absolutely on fire. CES orders were up 35% for the year, revenue grew 24%, and here's the key - services orders up 27% and revenue up 26%. That's the high-margin aftermarket business that keeps printing money for decades after an engine is sold.

**ALEX:** Right, and their Defense, Power & Technology segment, while smaller, also showed solid growth with orders up 19% and revenue up 11%. But let's dig into what's happening operationally because there were some really interesting strategic moves announced.

**JORDAN:** Absolutely. They're doing a major organizational restructuring. They're expanding their CES division to include their Technology & Operations team, now led by Muhammad Ali. The goal is better end-to-end engine lifecycle management. And they're elevating their customer-facing teams to report directly to the CEO.

**ALEX:** That organizational change seems designed to address what Culp acknowledged multiple times - their customers need more from them, faster. They talked extensively a

This episode includes AI-generated content.

**Beta Finch Podcast Script: Deere Q1 2026 Earnings**

ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, and I'm joined as always by Jordan. Today we're digging into Deere & Company's first quarter 2026 results - and folks, this is a company that's showing some real signs of life after what's been a pretty challenging agricultural cycle.

JORDAN: That's right, Alex. And before we dive in, I want to make sure our listeners know that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

ALEX: Thanks, Jordan. Now, let's talk numbers because Deere really impressed here. They posted $9.6 billion in net sales and revenues, up 13% year-over-year, with equipment operations specifically growing 18% to $8 billion. Net income came in at $656 million, or $2.42 per share.

JORDAN: What I found particularly encouraging is that they beat their own expectations across the board. Management said all business segments performed ahead of plan, driven primarily by better-than-expected shipment volumes. And here's the kicker - they're calling 2026 the bottom of the current agricultural cycle.

ALEX: That's huge, Jordan. Let's break down the segments because there are some really interesting dynamics here. Small Ag & Turf was the star performer with 24% growth to $2.2 billion in sales and a 9% operating margin. Meanwhile, Construction & Forestry jumped 34% to $2.7 billion.

JORDAN: The Construction & Forestry story is particularly compelling. Their order bank has risen by over 50% in just the past quarter - that's the highest level since May 2024. Management is seeing strength across infrastructure projects, data center construction, and rental re-fleeting. It's giving them clear visibility into the second half of the fiscal year.

ALEX: And that's translating into some serious guidance raises. They bumped their Construction & Forestry net sales forecast to up around 15% for the full year, with operating margins now expected between 9-11%. But what really caught my attention was the Large Ag discussion.

JORDAN: Right, so Large Ag has been the problem child for Deere, but there are green shoots emerging. While the North American Large Ag industry is still expected to decline 15-20% this year, management noted that large tractor order velocity has picked up, and their rolling order books now provide visibility into the fourth quarter.

ALEX: The used inventory story is fascinating too. They've made significant progress reducing used equipment inventory - model year 2022 and 2023 8R tractors are down over 40% from their peak, and just in this quarter alone, they dropped 20% sequentially. That's clearing the trade ladder and enabling more replacement demand.

JORDAN: Let's talk about some of the strategic moves they're making. The big announcement is their new Deere-designed 20-ton class excavators launching at CONEXPO. This is their first fully Deere-designed and North Carolina-built excavator line, targeting about 40% of the North American construction equipment market.

ALEX: And they completed the acquisition of Tenna, which is all about digitizing construction workflows and fleet management. This fits into their three-layer strategy: machines, tasks, and job sites. They want to help contractors optimize not just individual machines, but entire operations.

JORDAN: The technology adoption numbers are impressive too. They now have over 500 million engaged acres - that's up 10% from a year ago, with nearly a third being "highly engaged." On the combine side, 99% of combines ordered through their early order program had some level of harvest automation, with nearly 80% taking the ultimate package.

ALEX: Now, it wasn't all sunshine and rainbows. They're dealing with $1.2 billion in tariff costs this year, and there are some reg

This episode includes AI-generated content.

**BETA FINCH PODCAST SCRIPT**

---

ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown where we dig into the numbers that matter. I'm Alex.

JORDAN: And I'm Jordan. Today we're talking about Caterpillar's Q4 2025 results, and wow - this was a record-breaking quarter in more ways than one.

ALEX: Before we dive in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Absolutely. Now Alex, when you say record-breaking, you're not kidding. Let's start with the headline numbers - what jumped out at you?

ALEX: The sheer scale of these results is impressive. Caterpillar posted record quarterly sales of $19.1 billion - that's up 18% year-over-year. But here's what's really eye-catching: their backlog hit a record $51 billion. That's up 71% from last year, Jordan. We're talking about $21 billion in new backlog growth.

JORDAN: That backlog number is staggering. And it's not just one segment driving this - they saw strength across Construction Industries, Resource Industries, and especially Power and Energy. The Power and Energy segment alone grew 23% in the quarter to $9.4 billion in sales.

ALEX: Right, and CEO Joe Creed was pretty excited about this. He mentioned they had "unprecedented order strength across all business segments." What's interesting is that only about 62% of that $51 billion backlog is expected to deliver in the next twelve months. That's lower than their historical average, which tells us they're booking orders well into 2027 and beyond.

JORDAN: That's a double-edged sword, isn't it? On one hand, it provides incredible revenue visibility. On the other hand, it locks them into deliveries at prices set today, while their costs - especially tariff costs - keep climbing. Speaking of tariffs, that was a major theme throughout this call.

ALEX: Oh absolutely. Tariffs were the elephant in the room. They faced $1.7 billion in net incremental tariff costs in 2025, and they're projecting that to jump to $2.6 billion in 2026. CFO Andrew Bonfield was pretty direct about this - he said margins will remain "near the bottom of the target range" because of these tariff headwinds.

JORDAN: And yet, they still managed to deliver a 17.2% adjusted operating profit margin for the full year, which was within their target range. That's solid execution under pressure. But let's talk about what's really driving this growth - the data center boom. This is where things get fascinating.

ALEX: Yes! The AI and cloud computing infrastructure build-out is creating massive demand for Caterpillar's power generation equipment. They announced a huge order yesterday - 2 gigawatts of power generation equipment for something called the Monarch Compute Campus. Joe Creed said this is one of their largest single orders ever for complete power solutions.

JORDAN: And get this - they've now booked four separate orders of at least one gigawatt each for data center prime power applications. Creed mentioned they're seeing customers shift from backup power to prime power, where Caterpillar equipment runs continuously to power these data centers. That's huge for their services business down the road.

ALEX: Exactly. Because when you're running equipment 24/7, you need a lot more maintenance and service. Their services revenue hit $24 billion in 2025, and they're targeting $30 billion by 2030. The data center boom could be a major driver of that growth.

JORDAN: Now, let's talk about the segments. Power and Energy was clearly the star, but Construction Industries also had a strong quarter with 15% sales growth. What's interesting is that Creed attributed some of this to returning to "normal seasonal patterns" - apparently 2025 started unusually slow.

ALEX: Right, and he's optimistic about 2026 for Construction Indust

This episode includes AI-generated content.

ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, and joining me as always is Jordan. Today we're diving into Boeing's Q4 2025 earnings, which just dropped, and wow – there's a lot to unpack here.

JORDAN: There really is, Alex. But before we get into the nitty-gritty, I need to share our standard disclaimer: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

ALEX: Absolutely. Now Jordan, let's start with the headline numbers because they're actually pretty impressive on the surface.

JORDAN: They really are! Boeing reported $23.9 billion in quarterly revenue – and get this – that's their highest quarterly total since 2018. Revenue was up a massive 57% year-over-year. For the full year, they hit $89.5 billion, up 34%.

ALEX: That's a significant turnaround. What's driving those numbers?

JORDAN: It's really a combination of higher commercial deliveries and better operational performance across the board. They delivered 600 commercial aircraft for the year – again, the most since 2018. The 737 MAX program delivered 447 planes, while the 787 contributed 88 deliveries.

ALEX: Now, the earnings picture gets a bit more complex, right? Because there's this big one-time gain in there.

JORDAN: Exactly. Core earnings per share came in at $9.92, but here's the thing – $11.83 of that was from selling their Digital Aviation Solutions business for about $10.6 billion. Strip that out, and you're looking at underlying operations that are still losing money, but improving significantly from the prior year.

ALEX: Let's talk about what CEO Kelly Ortberg had to say about their turnaround plan. He seems cautiously optimistic but realistic about the challenges ahead.

JORDAN: I thought his tone was really measured. He said "we haven't fully turned the corner, but we're making real progress." That feels honest – they're not overselling the recovery. He highlighted their four-point plan: stabilize the business, execute on development programs, change the culture, and build for the future.

ALEX: Speaking of those development programs, there's some movement on the certification front for their delayed aircraft, right?

JORDAN: Yes, but it's a mixed bag. The 737-10 got approval for its final phase of certification flight testing, which is progress. They still expect both the 737-7 and 737-10 to get certified in 2026. For the 777X, they're sticking with first delivery in 2027, though they did mention a potential engine durability issue they're working through with GE.

ALEX: Now let's get to what investors are probably most interested in – the cash flow situation. This has been Boeing's Achilles' heel for years.

JORDAN: This is where it gets really interesting. They generated positive free cash flow of $375 million in Q4 and used $1.9 billion for the full year – but that was actually better than expected. More importantly, CFO Jay Mollave guided to positive free cash flow of $1 billion to $3 billion for 2026.

ALEX: But there are a lot of moving parts affecting that cash flow, aren't there?

JORDAN: Oh absolutely. Mollave walked through what he called "legacy issues" that are weighing on cash flow. The biggest one is the 777X program, which won't start delivering until 2027, so they're spending cash to build planes but not getting the full payment from customers yet. He said that program alone will be a higher cash use in 2026 than 2025.

ALEX: And then there are these "customer considerations" – essentially compensation for past delivery delays.

JORDAN: Right, and "excess advances" where they've already taken customer cash for planes they haven't delivered yet. These are both legacies of the production problems and MAX grounding from years past. Mollave said when you adjust for all these temporary issues, the underlying b

This episode includes AI-generated content.