Boeing delays 737 MAX output goal, shares hit 18-month low

Boeing will not reach a steady 737 MAX production rate of 47 jets a month until early 2027, CEO Kelly Ortberg said on Tuesday, Oct. 27. Because of the delay, the planemaker will miss its goal of delivering 500 jets this year, Reuters reported. Ortberg had planned to hit that rate this past summer but told CNBC it would now take "into early next year," according to Reuters. The next step up, to 52 jets a month, is now planned for the second half of 2027, CNBC reported.reuters.com+1

Boeing shares fell sharply and hit an 18-month low, Seeking Alpha reported via TradingView. Investors were reacting to the slower ramp and a weaker cash outlook.tradingview.com

Wings slow the ramp

On the earnings call, Ortberg said some of the "flow enablers" meant to help the wing shop support 47 jets a month "just flat out did not yield the flow savings," according to a transcript published by Benzinga. Boeing is adding capacity in some areas. He said that reaching 52 a month also depends on getting the new North Line in Everett certified and producing, and on stable fuselage output in Wichita. "It's more important that we do this ramp right than what particular month we achieve a rate break," he said, per the transcript.benzinga.com

The cash outlook also disappointed. Boeing expects about $3 billion in free cash flow in 2027 and $6 billion in 2028. Analysts had expected $5.6 billion and $9.6 billion, according to LSEG data cited by Reuters. Ortberg said Boeing expects to reach $10 billion in free cash flow in 2029, AFP reported.nampa.org+1

Mixed third quarter

Boeing posted a net loss of $116 million on revenue of $24.2 billion, up 4% from a year earlier, The Seattle Times reported. Its adjusted loss of 34 cents per share was wider than the 21 cents analysts expected. The commercial airplanes unit lost $697 million, which Boeing blamed on a less profitable mix of deliveries and higher production costs.seattletimes.com+1

Boeing delivered 161 jets in the quarter and 475 through September. Its total backlog reached a record $745 billion. The 737-7 won FAA certification during the quarter and the 737-10 followed in October. Boeing also won the Navy's F/A-XX fighter contract.aerospaceglobalnews.com+1

Discipline versus pressure

Before Ortberg arrived in 2024, Boeing's quality problems were linked to rushed rate increases, Reuters noted. "Everybody wants us to go faster, but we're going to do it right," Ortberg told CNBC, The Seattle Times reported. In a memo to employees, he wrote: "Expectations are rising, and they should. We have a stronger foundation than a year ago, but we also have more work to do."reuters.com+1