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Boeing Co. (BA) delivered a strong Q1 earnings report this week, beating top- and bottom-line expectations. The market certainly liked what it saw and viewed Q1 as a step in the right direction. It feels like investors are finally waking up to what we’ve been pounding the table on for the better part of the last year.

Revenue came in at $19.5 billion (+18% year-over-year), slightly ahead of consensus estimates at $19.49 billion. EPS was ($0.49), much better than consensus expectations of ($1.25). Boeing, despite its flaws and missteps (and there have been plenty), still operates in a growing global duopoly with over a $0.5 TRILLION backlog.

You can get a lot of things wrong. But when you’re in a business like that, it’s hard not to have a recovery.

Like we’ve said before, customers of Boeing really have two options:

1) They can say, “Boeing, I’ve had enough of your issues and delays. I’m taking my business to Airbus.” To which Airbus will say, “Fantastic, we’re happy to have you. You can expect your plane in about 10 years.”

OR

2) “Boeing, this process has been frustrating. Please get your act together. I’d really like that plane now, and if you’ve got any extras, I’ll take all I can get.”

And in real time, we’re seeing that dynamic play out. Countries and airlines are jumping at the chance to scoop up any planes refused by China and move up in the queue.

Recommended Action: Buy BA.

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