- Boeing lowered its full-year delivery target, saying it will fall short of its 500-plane 737 production target for the year and deliver closer to 90 787 Dreamliners, the low end of guidance. CEO Kelly Ortberg said Boeing is now targeting a 737 Max production rate of 52 a month in the second half of 2027, from about 47 today, because of a slower pace of wing production.
- The commercial airplane unit lost $697 million against the $360.8 million deficit analysts expected, nearly double the estimate (Lumida calculation). The core loss of 34 cents a share was wider than the 21 cents expected, even as revenue rose 4% to $24.2 billion and beat estimates.
- Defense was the bright spot, with defense revenue up 15% to $7.94 billion and earnings boosted by rising global defense spending and the sale of HRL Laboratories. Free cash flow of $464 million beat the $325.1 million estimate, which RBC’s Ken Herbert called “the highlight in the quarter.”
- The stock fell 10%, its steepest drop since April 2025, as investors focused on the slower production ramp. Boeing reiterated that first 777-9 deliveries are planned for next year, about six years behind schedule, and said consolidated debt was unchanged at $45.9 billion.
What Happened?
Boeing reported a third-quarter net loss of $116 million, or 26 cents a share, compared with a $5.34 billion loss a year earlier, when it took a charge of nearly $5 billion on the delayed 777X program. Boeing delivered 161 commercial airplanes in the quarter, one more than a year earlier, but commercial revenue fell 3% to $10.72 billion with a negative operating margin of 6.5%. “I know everybody wants us to go faster but we’re going to do it right,” Ortberg told CNBC. The company has $10 billion of undrawn credit facilities.
Why It Matters?
Deliveries drive Boeing’s cash flow because airlines pay most of an aircraft’s price on handover, so a slower 737 ramp delays the cash recovery investors have been betting on. Engine supply has also held back output, and Ortberg said in September that Boeing lacked the engine delivery performance needed to raise 787 output to 10 a month from eight. The gap between a profitable defense unit and a loss-making jet business shows how uneven the turnaround still is.
What’s Next?
The stronger cash flow puts the $1 billion to $3 billion free cash flow guidance more within reach, though Boeing gave no 2027 cash flow guidance; Ortberg said the figure will keep rising toward the long-term $10 billion target. Recent FAA certification of the 737 Max 10 and a US Navy fighter jet win provide support. Rival Airbus, which has pulled ahead on deliveries, reports results on Wednesday.
Affected Tickers and Coins: BA
