Boeing Co. has lowered its full-year aircraft delivery targets and announced delays in ramping up production rates for its 737 and 787 aircraft, leading to a significant drop in its share price. During a call with analysts on Tuesday, CEO Kelly Ortberg confirmed the company will fall short of its goal to deliver 500 737 jets this year, while 787 Dreamliner deliveries are expected to be nearer the low end of the forecast at around 90 units.
The company, based in Arlington, Virginia, now anticipates reaching its target production rate of 47 737 jets per month in early 2027, a delay of approximately two years from earlier projections made in May. Boeing plans to increase monthly output further to 52 jets in the second half of 2027. Production constraints remain a challenge, particularly with fuselage manufacturing at its Wichita, Kansas plant, and wing production issues that have impacted the 777 freighter, 767, and KC-46 aerial refueling tanker programs. While wing shipments have resumed after a dispute with suppliers, Boeing expects disruptions to affect results over the coming quarters.
Boeing’s commercial airplane division posted a quarterly loss of $697 million, wider than analyst expectations and reflecting ongoing production struggles. However, this loss marks an improvement compared to the $4.9 billion charge the company recorded a year ago related to delays in the 777-9 widebody jet program. Boeing reiterated plans to begin delivering the 777-9 in 2027, aiming for regulatory certification by midyear with a planned initial delivery volume of 10 to 15 aircraft.
Despite setbacks in its commercial segment, Boeing’s defense and space division showed growth, supported by increased global defense spending and the recent sale of a co-owned research laboratory. Boeing Global Services also reported strong performance with $1 billion in earnings and an operating margin of 18.3%.
Free cash flow for the quarter stood at $464 million, surpassing analyst estimates and narrowing the gap toward the company’s annual guidance of $1 billion to $3 billion. However, Boeing reduced expectations for free cash flow growth over the longer term, now projecting it will reach $1 billion by 2029, one year later than previously anticipated.
Since Ortberg’s appointment as CEO in 2024, Boeing has focused on addressing its debt burden, restoring regulatory relationships, and methodically increasing production rates. Ortberg acknowledged that while progress has been made, the company faces ongoing challenges in fulfilling its backlog and improving operational culture. “Expectations are rising, and they should,” he said in a memo to employees following the earnings release.
Boeing’s shares fell nearly 10%, marking the worst daily decline in more than 18 months, as investors reacted to the delayed production timeline and softer free cash flow outlook. Analysts noted that despite the hurdles, Boeing’s long-term prospects remain supported by strong market demand and limited competition, mainly from Europe's Airbus. Nonetheless, the pace of recovery and cash flow growth will continue to be closely watched by the market.