Revenue rose 4% and beat forecasts, but the core loss of 34 cents a share was wider than the 21 cents analysts expected. The commercial airplane unit lost money at a negative 6.5% margin, and defense profit leaned on a one-time gain.
Boeing has more orders than ever. Building the planes is still costing it money.
The company reported third-quarter revenue of $24.19 billion, up 4% from a year earlier and above the $23.84 billion analysts expected, according to LSEG. Its core loss, which excludes certain pension costs, was 34 cents a share, wider than the 21-cent loss analysts expected. On a GAAP basis, Boeing lost 26 cents a share, compared with a loss of $7.14 a year earlier.
The shares closed down 10.7% at $168.18, after touching $167.43 during the session, a new 52-week low. The Dow Jones Industrial Average closed roughly flat.
Where the money went
The commercial airplane business was the problem. Revenue was about $10.7 billion, slightly lower than a year earlier, and its operating margin was negative 6.5%. Boeing said the margin "primarily reflects less favorable delivery mix, higher projected costs associated with future production rate adjustments and higher estimated supply chain costs."
The other two units did better. Global Services revenue rose 4% to $5.57 billion with an 18.3% margin. Defense, Space & Security revenue rose 15% to $7.94 billion, and its margin improved to 6.2% from 1.7%. That figure, however, includes a $252 million gain on the sale of HRL Laboratories. Without it, the defense margin would have been about 3%.
Cash and backlog
The positive numbers were real. Total backlog reached a record $745 billion, including more than 6,300 commercial airplanes. Commercial deliveries rose to 161 from 160. Operating cash flow was $1.5 billion, including about $0.7 billion of payments tied to a Justice Department settlement, and free cash flow was $464 million, a second straight positive quarter. Boeing ended the quarter with $20.7 billion of cash and marketable securities and $45.9 billion of debt.
The production rate
The 737 "continues to progress toward stabilized production of 47 per month," Boeing said. The 737-7 received amended type certification in the third quarter and the 737-10 in October. The 787 is steady at eight a month, and the first 777X delivery is still expected in 2027. Boeing was also selected for the U.S. Navy's F/A-XX fighter program.
Boeing does not plan to raise 737 output significantly until late 2027, CNBC reported. Higher production is how an aircraft maker spreads fixed costs and turns backlog into profit, so the pace of that ramp is central to when the commercial unit stops losing money.
Two readings
One reading is that the business is recovering on the measures that matter most for the long term. Demand is at a record, certifications are arriving, cash flow is positive and debt is flat.
The other is that the costs of getting there keep rising. The commercial unit's loss reflects higher projected costs for future rate changes and the supply chain, the defense improvement depended partly on a one-time sale, and the core loss was wider than expected. A backlog only becomes profit when the planes can be built at a margin.
What to watch
The timing and cost of moving the 737 above 47 a month, supply-chain cost trends, fourth-quarter cash flow, 777X certification, and Boeing's next production update.