The bottleneck is wings. Boeing is still trying to hold 737 output steady at 47 jets a month, and CEO Kelly Ortberg told Tuesday's earnings call that wing production has to catch up before the program can step higher.
That single constraint runs through the rest of the quarter. Ortberg dated the step up to 52 jets a month to the second half of 2027, and the company said it would come up shy of its target of 500 737 deliveries in 2026. The quarter's actual results were not the problem; the three-year cash-flow guidance was.
Key numbers
- 10% drop in Boeing shares on Tuesday, their worst day since the April 2025 tariff selloff and a fresh 52-week low, according to CNBC
- $24.19 billion in third-quarter revenue, up 4% year over year and above the $23.84 billion consensus compiled by LSEG
- 34 cents adjusted loss per share, wider than the 21-cent loss in the LSEG consensus
- $745 billion backlog at the end of the quarter, a company record
The cash-flow ladder moved out by a year
Free cash flow is the number Boeing is judged on while it works back toward net income profitability. In the July-to-September quarter it came in at $464 million, above the $330 million consensus compiled by FactSet and the second quarter in a row above expectations, CNBC's Investing Club reported. The company also kept its $2 billion free-cash-flow figure for 2026.
The guidance for the years after that is what moved the stock. On the call, Ortberg laid out $3 billion of free cash flow for 2027, $6 billion for 2028 and the company's $10 billion annual target in 2029. The FactSet consensus figures for those years were $5.7 billion, $9.6 billion and $12.9 billion. In short, Boeing dated its $10 billion target a year later than Wall Street had modeled, with 2027 capital spending on the next-generation Navy fighter contract it won in September holding that year back.
In plain words: free cash flow is operating cash flow minus what a company spends on plants, tooling and equipment. It is the cash left over that can pay down debt or reach shareholders. When a manufacturer cannot lift output on schedule, that cash arrives later, which is why a delivery delay shows up as a financial headline.
The order book was the other side of the quarter
Boeing exited the quarter with a record $745 billion backlog, including $612 billion and more than 6,300 airplanes in commercial aircraft after 300 net orders in the quarter. Defense, Space and Security booked $23 billion of orders and ended with a record $101 billion backlog, which does not include the Navy F/A-XX fighter award. Global Services took $5 billion of orders and finished with a $33 billion backlog, and CFO Jay Malave said both its commercial and government businesses delivered double-digit margins in the quarter.
Ortberg said Boeing has not seen any change in customer demand despite the Middle East conflict pushing jet fuel prices higher, and argued that costlier fuel makes more fuel-efficient jets such as the 737 Max 10 more attractive as older aircraft are retired. He added that airlines have mostly been passing higher fuel costs into ticket prices. Both of the final 737 Max variants are now certified by the Federal Aviation Administration: the Max 7 in August and the Max 10 last week.
The reports I read agree on the cause of Tuesday's fall. MarketWatch framed it as the delivery shortfall casting doubt on the turnaround plan; CNBC framed it as the multi-year cash-flow reset. Both point at the same production math.
What to watch
- Before year-end 2026: Boeing's planned start of the 787 Dreamliner ramp from eight to 10 a month, on the company's stated timeline
- 2027: FAA certification of the 777-9 and the start of its deliveries, which Boeing still dates to next year
- Second half of 2027: the 737 output step from 47 to 52 a month, as described by Ortberg on the call