New York (AFP) – Boeing on Tuesday reported a smaller quarterly loss compared with the same period last year — when plane certification delay costs heavily dented results — as it ramps up output carefully. The aviation giant reported a third-quarter loss of $116 million, compared with a loss of $5.3 billion in the year-ago period mostly from delays to certification of the 777X, the latest generation in Boeing’s long-range, wide-body commercial jet family.
The results translated into a larger earnings per share loss than analysts expected, but the company pointed to recent commercial aircraft certifications and Pentagon awards as signs of progress in its turnaround. Chief Executive Kelly Ortberg cited the Federal Aviation Administration’s certification of the 737 MAX 7 and 737 MAX 10 as well as a “transformational” Pentagon award for the US Navy’s next-generation fighter jets as evidence of momentum.
“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 message to employees. Revenues rose four percent to $24.2 billion behind increased deliveries in defense, space and security business and higher sales in Boeing global services. Boeing’s revenues for commercial aircraft dipped from the year-ago period.
The company said it was on track to achieve “stabilized production of 47 per month” for the 737 MAX. “I know everybody wants us to go faster, but we’re going to do it right,” Ortberg said Tuesday of efforts to stabilize output at a faster level. Ortberg joined Boeing as CEO in August 2024 as the company struggled to move past a pair of deadly 737 MAX crashes and a near-catastrophic 737 MAX flight in January 2024 in which a window blew out mid-flight. The company at the time faced criticism that the problems stemmed from a culture that chased quick payoffs while short-changing safety.
Increased jet deliveries translate into higher earnings. Under Ortberg, US officials have cleared Boeing to lift output from 38 to 42 a month and then from 42 to 47. Boeing has discussed raising MAX output to 63 a month or higher. “We’re delivering high-quality, safe aircraft, and so I expect that stabilization period will last the balance of this year into early next year,” Ortberg said on CNBC.
Boeing last week won US certification of the 737 MAX 10, the largest plane in the MAX family. That came on the heels of the August certification of the 737 MAX 7, the smallest jet in the family. Both approvals have arrived years after the original timetable, but set the stage for increased plane deliveries in the coming years. Of the still-outstanding 777X, Boeing said the program “continued to progress on 777-9 certification flight testing and remains on track for first delivery in 2027.” The 777-9 is a variant of the new aircraft.
– Free cash flow – The company reported $464 million in free cash flow in the quarter. Wall Street analysts have been tracking the company’s progress on attaining positive cash flow after a lengthy period in which it has not only reported frequent quarterly losses, but has also often had negative cash flow. Boeing executives have said they are confident they will attain $10 billion annual free cash flow but haven’t set a specific target date.
Ortberg said the company will have positive cash flow in 2026. “That cadence will continue to grow year on year,” Ortberg said. “We’ll increase that positive cash flow and get to that $10 billion target and beyond.” Boeing shares fell 1.3 percent in early trading.
© 2024 AFP
