Kelly Ortberg said Boeing is taking longer than expected to stabilize 737 output at 47 aircraft per month, while the company maintained its 2027 777X delivery target.
- Boeing said wing production remains the key constraint as it works to stabilize 737 output at 47 aircraft per month.
- Kelly Ortberg expects the remaining production issues to be addressed in 2027, with supply-chain conditions otherwise in good shape.
- Boeing said certification of the 737 MAX 10 is “coming very shortly.”
Shares of Boeing Co. (BA) fell 5.3% in Wednesday afternoon trading after CEO Kelly Ortberg said the company is taking longer than expected to stabilize 737 production at 47 aircraft per month. Boeing also said 737 MAX 10 certification is expected soon and maintained its plan to deliver 777X aircraft in 2027. Ortberg was presenting at the Morgan Stanley Laguna Conference.
BA stock ended the regular session 3.68% lower and edged 0.01% higher in after-hours trading at the time of writing.
737 Production Still Not Stable
Ortberg said the company is currently working toward a production rate of 47 737s per month but has not yet reached a “stable” pace. He said stabilizing production has taken longer than he anticipated.
“The supply chain is in really good shape, including CFM on the engines for our rate ramps on 737,” Ortberg said, according to TheFly. The current constraint is in “wing production,” where Boeing has not seen the “flow improvements” within the anticipated time frame.
Boeing has plans to address the issue and move to the next production rate, Ortberg said. He added that the company is in good shape from a supply-chain perspective to increase production once it addresses the remaining production issues, which he expects to happen next year.
Ortberg said he is not particularly concerned about near-term MAX supply-chain constraints. However, he expects supply-chain alignment with inventories to become more important when production reaches 52 and 57 aircraft per month, adding that inventory levels remain relatively high.
Boeing executives also said certification of the 737 MAX 10 is “coming very shortly,” according to TheFly.
BA Maintains 2027 777X Delivery Plan
Boeing continues to plan for 777X deliveries in 2027 despite additional testing that could push some certification work into next year.
The company said it is continuing “flight tests that are under the approved type inspection authorities.” However, Boeing must complete its mid-seal certification plan before it can begin extended-range flight testing.
Boeing said some testing could spill into next year and create a challenge between now and year-end, but the company continues to plan for 2027 deliveries.
Defense Charges Still Possible
Boeing also said the risk of additional charges in its defense business has been reduced, though it has not been eliminated.
Some programs remain in reach-forward loss, meaning significant cost increases could lead to additional charges. Boeing said it has worked with customers on plans intended to complete the programs within current estimates.
Boeing Prepares For Possible Work Stoppage
Boeing is also working to avoid a work stoppage during negotiations with the International Association of Machinists and Aerospace Workers (IAM) engineering union, which represents Boeing engineers. Executives said preventing a strike is the company’s top priority, given the potential impact on production and certification programs.
A strike would shut down the 777X certification program until engineers return and could also affect production.
Free Cash Flow Outlook
Boeing maintained its 2026 free cash flow guidance of “$1 to $3 billion” that the company “had laid out back in January,” with $2 billion still the midpoint. However, slower 737 and 787 production ramps make it less likely to exceed that midpoint. The company expects cash flow to grow in 2027 but said pricing penalties and excess customer advances will continue to weigh on it.
BA Stock: Stocktwits Retail Sentiment
On Stocktwits, retail sentiment for BA improved to ‘neutral’ from ‘bearish’ in the past 24 hours, while message volume was ‘normal’ during the same period.
BA stock has lost 7% year-to-date.
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