Boeing jetliner production challenges weigh on third-quarter results

What happened

Boeing reported a third-quarter loss of 26 cents per share. Its commercial airplane division had an operating loss of $697 million on revenue of $10.7 billion, which the company attributed to less profitable jetliner deliveries and higher production costs, including from its supply chain.

Confirmed

Global impact / market context

Boeing's core commercial airplane business is losing money on each sale, which means plane deliveries bring in less profit than they cost to build. That squeezes cash the company needs to repay its heavy debt and fund a turnaround after years of crises.

Analyst inference

The adjusted loss of 34 cents per share was worse than the 21 cents analysts expected, while the defense division's larger margins partly offset the jetliner weakness. The production challenge is raising costs: Boeing cannot lift 737 output from 42 to 47 jets a month, partly because wings are not made fast enough.

Analyst inference

What to watch

1. Boeing is trying to increase 737 output from 42 jets a month to 47 a month, a target it hoped to reach during the summer but had struggled to hit. Confirmed
2. If wing production and supply chain costs improve, more profitable jetliner deliveries could reduce the commercial division's operating loss and support free cash flow. Analyst inference
3. Watch whether the defense division's higher deliveries and larger margins continue to offset commercial airplane losses and help Boeing manage the debt left from past crises. Analyst inference

Evidence

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