BA: Free cash flow rose, but a steep Commercial Airplanes loss drove Q3 operating results negative

Boeing (BA) reported Q3 2026 earnings, delivering 161 commercial aircraft, a record $745B backlog, and multi-year free cash flow targets. Key milestones include FAA certification for 737-7 and 737-10. Challenges include delayed 737 production stability and supply chain disruptions. Management expects free cash flow growth, with $2B in 2026, $3B in 2027, $6B in 2028, and $10B in 2029, driven by higher deliveries and improved margins.

Boeing CEO Kelly Ortberg announced the company will miss its 737 production target of 47 jets per month until next year, pushing back the initial timeline. The delay is attributed to slow wing production, impacting cash flow. Shares dropped 2.5% premarket. Boeing reported a Q3 adjusted loss of $0.34 per share, worse than expected. Recent wins include 737 MAX 7 certification and a Navy fighter contract.

Boeing reported a reduced Q3 net loss of $116M, down from $5.34B a year earlier, with revenue up 4% to $24.19B. Commercial airplanes revenue fell 3% to $10.7B, while defense and services revenue rose 15% and 4%, respectively. Operating cash flow increased 33% to $1.5B, and the order backlog reached a record $745B.

Boeing reported Q3 adjusted loss of $0.34 per share, missing estimates, but revenue of $24.2B beat expectations. Its order backlog grew to $745B, including 6,300 planes. CEO Ortberg said production targets for the 737 Max will be delayed until 2027, causing shares to fall 10.7%. The company expects $2B in free cash flow this year and $10B by 2029, below Wall Street's prior estimates.

The Dow Jones Industrial Average closed at 52,377.57, up 0.03%, underperforming the Nasdaq and S&P 500. Boeing's 9% drop due to a larger-than-expected loss weighed on the index. Tech gains, including Nvidia's investment in Meta and Apple's new product launches, supported the Dow. The Federal Reserve's rate decision and earnings from Microsoft, Amazon, and Apple are upcoming catalysts.

Boeing rolled out its first 737 MAX 10 from a new Everett assembly line, destined for WestJet. The aircraft requires modifications before delivery. The FAA must approve the line for production. Everett will support increased 737 production, aiming for 47/month by 2027. The MAX 10 received FAA certification on October 20.