Boeing (BA) Sinks 10% as 737 Ramp Slips and Cash Targets Slide

Boeing delivered a better quarter than a year ago and still got hammered. Shares fell about 10% on Tuesday, the stock's biggest intraday drop in 18 months, after management pushed back its 737 production timeline and laid out slower cash flow targets.

The headline numbers were mixed. Third-quarter revenue rose 4% to $24.19 billion, and the net loss shrank to $116 million, or 26 cents a share, from a $5.34 billion loss a year earlier, CNBC reported.

The adjusted loss was 34 cents a share, though, against a 21-cent loss expected by analysts surveyed by LSEG. Free cash flow came in at $464 million, ahead of a roughly $325 million Bloomberg consensus.

The trouble was the road ahead. CEO Kelly Ortberg said Boeing won't reach its 737 rate of 47 jets a month until early 2027, so the company will miss its 500-jet delivery target this year, according to Reuters.

Boeing is now targeting 52 jets a month in the second half of 2027. It blamed a slower-than-expected pace of wing production, and it expects to deliver about 90 787 Dreamliners this year, the bottom of its range.

Cash flow guidance landed even harder. Boeing sees free cash flow of $3 billion in 2027 and $6 billion in 2028, versus Wall Street's consensus of $5.6 billion and $9.6 billion. It now puts its $10 billion annual target in 2029, a year later than investors hoped.

Inside the business, defense carried the load. Defense revenue jumped 15% to $7.94 billion with $492 million in operating earnings, while global services earned about $1 billion. Commercial Airplanes revenue slipped 3% to $10.72 billion, with a $697 million operating loss.

"I've said before, our progress is not always going to be perfectly linear, but we continue to improve, and I'm confident we are on the right track." — Kelly Ortberg, CEO, Boeing

Analysts weren't thrilled, but few walked away. JPMorgan's Seth Seifman said commercial margins missed by about 280 basis points on rising costs, and kept an Overweight rating with a $290 target.

Jefferies' Sheila Kahyaoglu noted that Boeing didn't reaffirm its 2026 free cash flow guidance, but stayed at Buy with a $265 target. RBC's Kenneth Herbert, at Outperform with a $235 target, pointed to weaker core earnings and a bigger commercial loss than expected.

There are real positives underneath. Boeing's backlog hit a record $745 billion, including more than 6,300 commercial airplanes. The 737 MAX 10 won FAA certification this month, and the Navy picked Boeing for its F/A-XX next-generation fighter.

Bloomberg Intelligence's George Ferguson offered a calmer take on the balance sheet. Quarterly operating cash flow of $1.5 billion helps protect roughly $20 billion in liquidity, and net debt fell to $25.2 billion from $30.4 billion a year ago.

The risk is that this keeps happening. Commercial-aircraft losses have hovered around $1.3 billion a quarter on a unit-accounting basis for five straight quarters, per JPMorgan. A single wing-production bottleneck was enough to reset the entire cash flow story.

For investors, the shift is from "when does it recover" to "how long does it take." The analysts' targets sit well above the share price, but those targets assume the 2027 ramp happens on time. Waiting for evidence of that is a reasonable stance.

Key markers to watch: monthly delivery counts, any update on wing production pace, and whether management reaffirms 2026 cash flow guidance next quarter. Airbus reports Wednesday, and that comparison will show how much ground Boeing still has to cover.

Bottom line: Boeing's problems are getting smaller, but the timeline for fixing them just got longer, and the stock is paying for it.