Boeing’s stock fell roughly 9% on Tuesday after the company disclosed a cautious production growth outlook, prompting Wall Street to question how quickly recent aircraft certifications and defense contracts will impact its earnings.
CEO Kelly Ortberg stated that Boeing does not anticipate increasing 737 MAX production to 52 aircraft per month until the latter half of 2027, as it first needs to stabilize output at 47 per month.
While investors see higher 737 MAX output as crucial for revenue and profit expansion, Ortberg, who assumed the CEO role after recent safety incidents, defended the measured approach.
“We are making progress, but there remains more work to be done, and I expect it will take until next year for full stability at the current rate of 47 aircraft per month,” Ortberg said, noting the need for greater predictability in wing manufacturing and fuselage production at its Kansas facility.
“Ensuring we execute the ramp correctly is more important than hitting a specific monthly production milestone,” Ortberg added.
Ortberg also set a timeline for achieving $10 billion (€8.98 bn) in annual free cash flow, stating the company expects to reach this financial health milestone in 2029.
Following Ortberg’s statement, shares continued to decline, indicating analysts had anticipated a faster timeline.
“While everyone wants us to accelerate, we will remain disciplined as we ramp up,” Ortberg said.
Ortberg became CEO in August 2024 as Boeing worked to recover from two fatal 737 MAX crashes and a recent near‑catastrophic 737 MAX incident in January 2024 where a cabin window ruptured mid‑flight.
At the time, the firm faced criticism that its culture prioritized rapid profit over safety.
Aviation analyst Richard Aboulafia of AeroDynamic Advisory noted in an email to AFP that Boeing is progressing “slow but steady,” yet the supply chain remains a major concern that is only partially within Boeing’s control.
Smaller loss
Ortberg’s remarks coincided with Boeing’s report of a $116 million (€100 m) loss in the third quarter, down from a $5.3 billion (€4.6 bn) loss a year earlier, largely due to delays in certifying the 777X, the newest addition to its long‑range wide‑body jet family.
The results resulted in a larger earnings‑per‑share decline than analysts had projected, though the stock moved only modestly after the earnings release.
Ortberg highlighted the FAA’s certification of the 737 MAX 7 and 737 MAX 10, as well as a “transformative” Pentagon award for the U.S. Navy’s next‑generation fighter jets, as signs of momentum.
Revenue increased 4% to $24.2 billion (€20.9 bn), driven by higher deliveries in defence, space and security, and stronger sales in Boeing Global Services.
Commercial aircraft revenue dipped year‑over‑year, with Boeing delivering 161 aircraft in the quarter—just one more than in the comparable 2025 period.
Boeing executives expressed confidence that the long‑delayed 777X will be certified in 2027, forecasting deliveries of 10 to 15 aircraft in the following year.
“We are confident the team is ready to execute these targets,” Ortberg said.
Ortberg expects free cash flow to rise gradually from roughly $2 billion (€1.7 bn) in 2026 to $6 billion (€5.2 bn) in 2028 and $10 billion (€8.6 bn) in 2029, with further growth thereafter.
“As I said, over the past two years we have made exceptional progress in restoring trust, mitigating risk, transforming our culture, and rebuilding a foundation of safety and quality that will ensure lasting success,” he said.
“We have also been deliberate not to get ahead of ourselves, given the range of outcomes linked to the production ramp, certification timing, and other critical program execution,” he added.
“We understand that it has been challenging for shareholders to gauge how our progress will affect financial performance. We are now at a stage where the range of possible outcomes is narrowing.”