Boeing’s 737 rate 52 slips to 2H27; the stock falls 10%

Boeing moved the finish line. The MAX line is still stabilizing at 47 a month; 52 now waits for 2H27, and the stock fell about 10%. The prior-year loss carried the 777X charge, so the EPS comparison tells you little. Free cash flow of $464m came after about $700m of DOJ settlement payments. Backlog is a record $745.4bn, with $611.8bn at Commercial Airplanes, with over 6,300 aircraft. Cash is $20.7bn against $45.9bn of debt. A preview has consensus at revenue of about $24.96bn and EPS of $0.01, so Boeing missed on both. Defense and Services carried the quarter. Defense earned a 6.2% margin, helped by a $252m gain on the HRL Laboratories sale, and Global Services ran at 18.3%. Boeing was also picked for the Navy's F/A-XX fighter, which isn't yet in the backlog. Wings were already the named bottleneck before the call, but the date is the surprise. We wrote in our MAX 10 piece that 47 a month was a target and not an achievement, and that still holds. Ortberg said wing production improvements "have taken longer than expected". Reaching 52 needs North Line certification in Everett, stable wing and back-shop operations, and higher fuselage output in Wichita. He added: "It's more important that we do this ramp right than what particular month we achieve a rate break." That's absolutely correct, and Wall Street is the primary target of that message. Customers frustrated with delays will prefer working aircraft when they arrive. They've seen enough operational shocks. image: Boeing Third-quarter deliveries tell the story. Boeing delivered 124 737s, about 41 a month, against a line rate it calls 47. A call summary says 737 deliveries will fall short of 500 this year. Through September, Boeing had delivered 367 737s by one count, leaving 133 for the fourth quarter, or about 44 a month. This is what the market sold. Boeing guided free cash flow of about $2bn in 2026, $3bn in 2027, $6bn in 2028 and $10bn in 2029. An earlier consensus we saw from TIKR via AeroHaber was $2.18bn, $5.55bn, and $9.75bn for 2026 through 2028. That puts 2027 at roughly 46% below the Street and 2028 at roughly 38% below. Management called it "more of a one-year shift to the right". The endpoint is unchanged, but the runway is longer. The 2027 figure assumes 777X certification by midyear and about $5bn of capex. CFO Jay Malave said a one- to two-month 777X delay fits inside the $3bn. Lower customer deposits could take a few billion off. The 2029 plan assumes 737 deliveries in the mid-to-high 50s a month and about 12 787s a month. Boeing delivered about 41 a month this quarter. The call summaries we read don't explain how a line that cannot hold 47 gets to the mid-50s in three years. Perhaps the North Line is more efficient as a straight line than with the U-turn at Renton? Boeing expects to deliver about 30 built MAX 7 and MAX 10 aircraft in 2027. Aviation Week counted 27 MAX 10s rolled out. That replaces the late-2026 delivery talk we saw after certification. It also leaves the software where it was. We found no fix date in the call coverage. Southwest and United told Boeing they don't want the current flight-management software on new aircraft, and Boeing's August notice to operators put the permanent update in early 2028. Those 30 parked aircraft either ship with something that exists or sit longer. Either way, this is sub-optimal. The 777X is the other timeline. First delivery is still 2027, for 10 to 15 aircraft. Boeing still needs FAA authorization for the remaining flight tests, including ETOPS, and builds about one a month. The company calls the program a significant cash use in 2027. Airbus had a flat third quarter, with 196 deliveries versus 201. It leads Boeing by 72 aircraft through September, 547 to 475. Boeing's slip doesn't fix Airbus, which needs 323 deliveries in the fourth quarter to hit its 870 target. But combined, the duopoly is looking at a softer delivery year. Boeing's news is a comfort to Airbus because it makes missing its own target more palatable. On the call, management said customers have not revised order plans in response to oil prices, though growth orders could soften. Demand for fuel-efficient jet replacements is strong. That is the demand story every carrier keeps saying. Boeing has the supply story, and Airbus does, too. The software fix date. The root cause of the wing issue beyond "longer than expected". How the mid-to-high 50s are supposed to happen. Boeing's rate is a year later, and its cash is lower. The wings remain a gate. The stock price drop reflects market doubt about how Boeing fixes these issues.

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