TLDR
- Boeing reported a Q3 loss of $7.14 per share on $23.3 billion in sales, missing Wall Street’s expectations of a $5 loss on $22.6 billion in sales.
- The company took a $4.9 billion charge related to its 777x twin-aisle jet program, larger than analysts expected.
- The 777x faces further certification delays, with commercial deliveries now potentially pushed into 2027 instead of late 2026.
- Boeing delivered 160 commercial jets in Q3, up from 116 a year ago, with 737 MAX production stabilized at 38 planes per month.
- Free cash flow turned positive for the first time since Q4 2023, and the defense business posted an operating profit after a $2.4 billion loss last year.
Boeing shares dropped 3% to $216.55 on Wednesday morning after the company reported third-quarter results that missed Wall Street estimates. The loss came despite higher aircraft deliveries and some operational improvements.
The aerospace manufacturer posted a per-share loss of $7.14 on sales of $23.3 billion. Analysts surveyed by FactSet had expected a loss of $5 per share on revenue of $22.6 billion.
Revenue climbed 30.4% from the prior year period when Boeing reported sales of $17.8 billion. The increase came from higher delivery volumes across its commercial airplane business.
Boeing delivered 160 commercial jets during the quarter. That’s up from 116 aircraft delivered in the same period last year.
Through September, the company has delivered 440 commercial jets and secured orders for 821 aircraft. Production of the 737 MAX has stabilized at 38 planes per month.
777x Program Faces New Setbacks
The quarter’s earnings took a major hit from a $4.9 billion charge tied to the 777x program. Vertical Research Partners analyst Rob Stallard had projected a charge between $2.5 billion and $4 billion.
The 777x is Boeing’s newest wide-body jet designed to carry more than 400 passengers. The program launched in 2013 but still hasn’t received approval for commercial service.
CEO Kelly Ortberg warned investors about certification delays at a Morgan Stanley conference in September. Commercial deliveries were expected to begin in late 2026.
Those deliveries may now slip into 2027. The 777x completed its first flight in 2020 but has faced ongoing regulatory hurdles.
The Federal Aviation Administration increased scrutiny of Boeing after problems emerged with the 737 MAX jets. That scrutiny has slowed the 777x certification process.
Positive Signs in Operations
Despite the loss, Boeing showed progress in turning around its operations. The company generated positive free cash flow for the first time since the fourth quarter of 2023.
Stallard called the results “OK” when excluding the 777x charge. The FAA recently approved Boeing to increase 737 MAX production to 42 planes per month.
That approval signals improving production quality at the company’s factories. Boeing’s defense business also turned a corner in the quarter.
The defense unit posted a positive operating profit after reporting a $2.4 billion loss in the same quarter last year. Options markets expected the stock to move about 5% in either direction following the earnings release.
Over the past four quarters, Boeing shares have moved an average of 3% after earnings reports. The stock split those moves evenly with two gains and two losses.
Shares had climbed 25% year-to-date before the earnings release. The current average analyst rating on Boeing is “buy” with 22 analysts recommending strong buy or buy.
Five analysts have hold ratings and none recommend selling. The median 12-month price target stands at $256.45, representing about 12.9% upside from the $223.33 closing price before earnings.
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