Boeing share price plummets with slower 737 production and free cash flow growth outlook

Boeing CEO Kelly Ortberg said on Tuesday that the company will not reach its 737 production rate target of 47 jets a month until early 2027, a serious setback to the company's ongoing recovery. As a result, the company will ‌not hit its delivery target of 500 jets this year. The company also expects much slower free cash flow growth than investors had expected - $3 billion next year and $6 billion in 2028, compared to Wall Street analysts' consensus projection of $5.6 billion and $9.6 billion, respectively, according to LSEG data.

Shares of the US planemaker fell 9.5% in early trading, reaching April 2025 lows, even as Boeing continues to recover from ‌years of crises and controversies that dented its reputation, drained cash and saddled it with a heavy debt load. The company had planned to reach 47 737 jets per ‌month this past summer, but it will take "into early next year," Ortberg said during an interview on CNBC.

In September, he said that Boeing has not been able to make wings fast enough. Deliveries of the popular single-aisle jetliner are a major driver of Boeing's cash flow.

"We are ramping up aircraft, and we're doing that in the right way," he said. Before Ortberg joined Boeing in 2024, the company had struggled for years with production quality problems that ⁠were attributed to rushing ​rate increases at the expense of quality.

There ⁠is pressure on the company to increase 737 output faster, "but we're going to be smart about this, stay disciplined, and the outlook is there," Ortberg said. The company continues to struggle with production challenges in its 787 program and ⁠777 freighters, as first reported by Reuters on Friday.

High fuel prices have kept demand up for more fuel-efficient jetliners, but "certainly something we have to continue to watch," Ortberg said on CNBC. During the quarter, Boeing ​secured certification for the 737 MAX 7 from US regulators, won the US Navy's sixth-generation F/A-XX fighter contract and generated free cash flow for another quarter, while certification of ⁠the larger MAX 10 followed in October.

"Expectations are rising, and they should. We have a stronger foundation than a year ago, but we also have more work to do to deliver on our backlog, strengthen our culture, and improve how ⁠we ​work every day," Ortberg said in a memo to employees after the results. Boeing reported an adjusted loss of 34 cents per share for the quarter through September, compared with market expectation of 21 cents, according to data compiled by LSEG.

Revenue at Boeing Commercial Airplanes dipped slightly to $10.7 billion, while operating loss stood at $697 million and margin shrank by just ⁠6.5% compared with a contraction of 48.3% a year ago. The company attributed the performance to less profitable jetliner deliveries and higher production costs, including from its supply chain.

At Boeing's defense division, ⁠higher deliveries, improved operational performance and a $252-million sale ⁠of a subsidiary contributed to nearly $500 million in quarterly earnings with an operating margin of 6.2%, up from 1.7% a year ago. Boeing Global Services earned $1 billion and posted an operating margin of 18.3%.

The US planemaker ended the quarter with $25.2 billion in net debt, down slightly from $25.9 billion ‌in the previous three months and $30.4 ‌billion a year ago.