Earnings: Boeing Has A 777X Problem

"Boeing ( NYSE: BA) reported third-quarter results this morning that split the difference between operational recovery and program setbacks. Revenue beat expectations, and the company achieved a critical milestone by turning positive on free cash flow for the first time since 2023. But a $4.9 billion charge tied to 777X certification delays and a core loss per share that missed estimates by $2.16 overshadowed the progress. Shares were mixed in early trading, reflecting the dual narrative."

"The headline that matters most is cash flow. Boeing generated $1.12 billion in operating cash flow and $238 million in free cash flow during the quarter. That's a turnaround from negative $1.35 billion in operating cash flow a year ago. For a company that has been burning cash since the 737 MAX crisis and pandemic pressures, this is the clearest sign that production discipline and safety investments are starting to pay off."

"Here's where the earnings stumbled. Boeing took a $4.9 billion charge related to 777X certification delays and pushed first delivery to 2027. That charge decimated the bottom line and explains why the core loss per share came in at negative $7.47 versus an expected loss of $5.31. The company said the airplane continues to perform well in flight testing, but the schedule slip signals that regulatory scrutiny and engineering complexity are taking longer to resolve than previously guided."

Boeing generated $1.12 billion in operating cash flow and $238 million in free cash flow, reversing a year-ago operating cash outflow of $1.35 billion. Revenue rose to $23.30 billion, up 30.6% year over year, supported by 160 commercial airplane deliveries—the highest quarterly total since 2018—and a backlog of $636 billion covering over 5,900 aircraft. Commercial Airplanes produced $11.1 billion in revenue. Boeing recorded a $4.9 billion charge tied to 777X certification delays, pushed first delivery to 2027, and reported a core loss per share of $7.47 versus expectations of $5.31.

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