Boeing – The Finance Class

INTRODUCTION

Boeing had good news and bad news in its third-quarter results, and investors focused on the bad news. The company narrowed its loss sharply and grew revenue, but its shares fell about 9% during its earnings call. The reason was simple: Boeing said it will not significantly ramp up production of its best-selling 737 Max plane until the second half of 2027.

WHAT HAPPENED

Boeing reported a third-quarter net loss of $116 million, or 26 cents per share, compared with a $5.34 billion loss, or $7.14 per share, a year earlier. Revenue rose 4% to $24.19 billion, above the $23.84 billion analysts expected. Free cash flow rose to $464 million, up from $238 million a year earlier.

But the adjusted loss per share, which strips out one-off items, was 34 cents, wider than the 21-cent loss analysts expected. And chief executive Kelly Ortberg said on the earnings call that Boeing is targeting a production rate of 52 planes a month only in the second half of 2027. The company is currently making about 47 Max planes a month.

WHY IT HAPPENED

The delay comes down to wings. Boeing has said that wing production is moving more slowly than expected, and stabilising production is taking longer than planned. Ortberg told CNBC that the company wants to get production right rather than go fast, saying, in effect, that everyone wants it to move faster but it will do the job properly.

The commercial aircraft business also struggled. Its revenue fell 3% to $10.72 billion, and it posted a negative operating margin of 6.5%, which Boeing blamed on a less favourable mix of deliveries, higher expected costs from future production changes, and higher supply chain costs. Boeing delivered 161 commercial airplanes in the quarter, just one more than a year earlier.

The defence business was the bright spot. Defence revenue jumped 15% to $7.94 billion, which helped narrow the overall loss.

KEY FIGURES

Third-quarter net loss: $116 million, vs $5.34 billion a year earlier
Revenue: $24.19 billion, up 4%, vs $23.84 billion expected
Adjusted loss per share: 34 cents, vs 21 cents expected
Free cash flow: $464 million, vs $238 million a year earlier
Commercial aircraft revenue: $10.72 billion, down 3%
Commercial airplanes delivered: 161
Defence revenue: $7.94 billion, up 15%
737 Max production now: about 47 a month; target: 52 a month in the second half of 2027
Shares: down about 9% during the earnings call

WHY IT MATTERS

Boeing only makes most of its money on a plane when it delivers it to an airline. That is why production speed matters so much. A delay of several months in ramping up from 47 to 52 planes a month means fewer deliveries, less cash coming in, and a slower recovery.

It also matters for airlines. Many airlines are waiting for new 737 Max planes to grow their fleets and replace older aircraft. If Boeing delivers more slowly, airlines may have to keep older planes flying longer or wait longer to add routes.

WHAT HAPPENS NEXT

There was one piece of good regulatory news. The Federal Aviation Administration signed off on the 737 Max 10, after approving the 737 Max 7 in August. Those were the final certifications for the Max family. But certification is not the same as delivery, and Boeing still needs to prove it can build planes steadily at higher rates without quality problems.

Investors will now watch three things: whether Boeing can stabilise production at 47 planes a month, whether wing output improves, and whether free cash flow keeps growing. Boeing expects to deliver 30 pre-built 737-7 and 737-10 aircraft starting in 2027, which could help cash flow in 2028 and beyond. But that is still a long way off.

FINAL THOUGHTS

Boeing’s quarter shows a company making real progress and still disappointing the market at the same time. The loss is much smaller, revenue beat expectations, and cash flow improved. But in the aircraft business, promises about future production matter as much as today’s numbers. Until Boeing can show it can build planes faster, and safely, investors will keep treating every delay as a reason to sell.

Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice.

Sources: CNBC, https://www.cnbc.com/2026/10/27/-boeing-ba-q3-2026-earnings.html; PrimeXBT, https://primexbt.com/news/boeing-stock-falls-9-as-737-max-ramp-up-slips-to-late-2027/