Boeing cuts delivery target, shares hit 18-month low as recovery takes longer
Boeing has announced a cut in its 737 Max delivery target for this year, which raises concerns. The company now aims to increase 737 production to 52 jets per month in the second half of next year. Boeing reported a wider than expected loss in its commercial airplane division but posted positive free cash flow results. Despite delays, the company plans to begin deliveries of its 777-9 jets next…
Boeing's stock plummeted to an 18-month low on Tuesday after the aerospace giant reduced its full-year delivery target for its 737 Max jets and delayed plans to boost production, according to Bloomberg. The company now anticipates delivering 52 737 Max jets per month in the second half of next year, up from the previous 47. This announcement came as Boeing's commercial airplane division reported a $697 million loss in the third quarter, which was higher than the previously expected $360.8 million deficit.
Despite this setback, Boeing's cash flow situation offered some relief, with free cash flow reaching $464 million in the quarter, surpassing estimates of $325.1 million. The company forecasts to generate approximately $2 billion in free cash this year, $3 billion next year, and $10 billion by 2029. Boeing also reaffirmed its plan to begin deliveries of its 777-9 next year, although the program is currently behind schedule by six years.
CEO Kelly Ortberg emphasized the importance of executing the production ramp-up correctly rather than adhering to a specific month. Analysts noted that the stock's reaction underscored the significance of increasing commercial aircraft production to Boeing's financial health.
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