💰 Market Cap: $169B | 🏢 172K Employees | 🌍 Global Aerospace Leader

👨‍💼 CEO Kelly Ortberg | 🎯 Production Recovery & Quality Focus | 🇺🇸 Arlington, VA

$217.14

📉 -$6.19 (-2.8%) Post-Earnings

+26% YTD | Q3 2025 Mixed Results

🚀 Needs:

737 MAX production ramps to 47/month by end-2026 using disciplined rate increases in increments of five with minimum 6-month stability periods between increases • 777X delivers on time in 2027 with 4,000+ flight test hours completed showing no major technical issues on airplane or engine • Defense IAM strike resolves quickly allowing $2.7B Pac-3 seeker contracts and $2.8B Evolve Strategic Satcom to proceed without delays • 787 hits rate 8 near-term after completing successful FAA capstone review, then 10/month with South Carolina expansion • Six KPIs remain healthy showing sustained production system stability • FAA delegation authority expands beyond limited airworthiness certificates as quality culture strengthens

⚖️ Needs:

737 MAX stabilizes at 38/month through Q1 2026 then methodically increases to 42/month following FAA agreement with six KPI monitoring • 160 commercial airplane deliveries per quarter maintained (highest since 2018) with improved quality feedback from customers • Defense executes contingency plan maintaining JDAM production at pre-strike rates while progressing MQ-25 and T-7A development • 787 demonstrates stability at rate 7 before moving to rate 8 near-term after successful capstone review • 777X completes 4,000+ flight test hours with certification in 2027 after resolving brakes, engines, takeoff and aerodynamic testing • 737-7 and 737-10 certify in 2026 after finalizing anti-ice design changes with 3,000+ lab testing hours

⚠️ Risk:

Another quality incident forces FAA to revoke limited delegation authority and cut 737 MAX cap below 38/month despite 75% traveled work reduction • 777X certification extends beyond 2027 despite 4,000+ flight hours showing airplane performing well, adding $3-5B additional charges • IAM strike continues indefinitely disrupting $2.7B Pac-3 and $2.8B Evolve Strategic Satcom contracts beyond contingency plan capacity • 787 fails to demonstrate rate 7 stability delaying move to rate 8 and South Carolina expansion investments • 737-7/10 anti-ice design changes rejected by FAA requiring redesign and pushing certification to late 2027 • Defense development programs encounter new technical issues despite "active management approach" • Major customers cancel 737 or 787 orders from $535B backlog citing ongoing delivery uncertainty

💰

What Happened

Revenue Beat: $23.3B (+30% YoY) driven by 160 jet deliveries, highest quarterly total since 2018

Core Loss: -$7.47 per share reflects $6.45 impact from $4.9B 777X charge, plus operational losses

Production Quality: 75% reduction in traveled work on 737, 60% reduction across all programs showing factory health

Cash Positive: $238M FCF, first positive quarter since Q4 2023, beat July expectations on higher deliveries

Net Orders: 161 aircraft including 57 787s to Turkish Airlines, 40 737s to Norwegian Group

📈

Why It Matters

Culture Change Working: Employees using new values/behaviors in daily tier meetings, "championing safety and quality is strengthening customer relationships"

Customer Confidence: Airlines giving "great feedback on quality and delivery performance," improved from past complaints

777X Transparency: "Double a typical flight test program" at 4,000+ hours, "no major technical issues on airplane or engine"

FAA Trust Rebuilding: Earned limited delegation authority for airworthiness certificates on some 737 MAX and 787s

Backlog Strength: $535B BCA backlog with 737 and 787 "both sold firm into the next decade"

🎯

What's Next

Q4 2025 Guidance: Positive $500M FCF before DOJ payment, $1B+ BDS seasonality inflow from tanker award

Full Year 2025: Updated to $2.5B cash usage (improved from $3B in July) driven by better commercial deliveries

737 Exit Rate: "Rolling at 42 rate as we speak," will "exit the year very soundly at 42/month rate"

787 Timing: Rate 8 by year-end, move to rate 10 "sometime next year," seats remain constraining item

Spirit/Jeppesen Close: Jeppesen closes Q4, Spirit awaiting US approval, cash balance ~$28B post-transactions

💡

Bottom Line for Retail Investors

Boeing's turnaround gained credibility in Q3 with 160 deliveries (highest since 2018) and $238M positive free cash flow, but the $4.9B 777X charge exposed deeper execution risks. CEO Ortberg admitted "we very much underestimated" the TIA approval process—the first airplane through this incremental FAA certification method. The company is now "rolling at 42 rate" on 737 MAX and will "exit the year very soundly" at that level, but Ortberg stressed discipline: "way more impactful to move when not ready." CFO Molavi improved 2025 guidance to $2.5B cash usage but wouldn't endorse the prior $10B free cash flow target, saying it's "early to comment on specific long-term framework." The 777X will burn $2B cash in 2026 (a "heavy use year"), won't reach neutrality until 2028, and positive cash flow not until 2029+. With IAM strike ongoing, seats constraining 787, and no long-term financial targets, this remains a show-me story where execution trumps promises.

✈️

Production Momentum Accelerating

FAA Process Established: Same capstone review process used for 737 (38→42) and 787 (5→7), "both sides understand process"

Supply Chain Confidence: "People gaining confidence in our ability to meet production output, fear of discounting is diminishing"

Inventory Buffer: "Excessive amount of inventory" on 737 enables move to 47/month, supply chain ramp needed beyond that

Administrator Support: Ortberg spoke with FAA Administrator Bedford who "agrees we need to look for ways to streamline process"

📦

Massive Backlog = Revenue Visibility

BCA Backlog: $535B with 5,900+ aircraft, 737 and 787 "both sold firm into the next decade"

BDS Record Backlog: $76B defense backlog, "well positioned for future" on global threat environment demand

Q3 Net Orders: 161 BCA (57 787s Turkish, 40 737s Norwegian), $9B BDS orders including $2.8B Space Force

BGS Book-to-Bill: 1.2x year-to-date, $8B Q3 orders, double-digit margins in commercial and government

💵

Cash Flow Inflection Underway

Q3 FCF Beat: $238M "better than July expectations," DOJ payment shifted to Q4 adding $700M headwind

Q4 Bridge: +$1B BDS seasonality (tanker), -$600M higher interest payments, flat to down BCA deliveries on 777 mix

2025 Outlook: Improved to $2.5B usage from $3B, "performance improved throughout the year, trending favorably"

2026 Framework Coming: Molavi: "Early to make strong call, going through planning process," full color in January

👔

New CEO Driving Cultural Reset

Charleston Doubling: "Double the manufacturing footprint" to support rates "in the teens," formal groundbreaking coming

Timeline: Expansion facilities available 2028, "don't need for rate 10" but required for 12-14/month targets

787 Constraints: Seats "continuing to struggle with certifications, will be with us for a little bit longer"

Higher CapEx 2026: Growth investments in Charleston and Saint Louis, closer to $3B annual run rate

⚠️

Quality Issues Still Lurking

Shadow Factory Closed: "Completed rework on last" pre-2023 737s, "shut down shadow factory in Q3," down to 57 stored units

Fragile Progress: One incident could revoke limited FAA delegation authority earned in Q3

737-7/10 Inventory: Approximately 35 units stable in inventory waiting for anti-ice certification in 2026

787 Legacy Units: 10 pre-2023 aircraft in inventory, "expect to deliver through 2026 aligned with customer fleet planning"

💸

777X Disaster + Massive Debt Load

$4.9B Q3 Charge: $6.45 per share impact, "we very much underestimated how much work" needed for TIA approvals with FAA

Testing Complete: 4,000+ flight hours "double a typical program," completed dry run tests, "no new issues with airplane or engines"

TIA Process Failure: "First airplane through incremental TIA process," couldn't get certification credit without approvals

2026-2028 Cash Pain: $2B headwind 2026, "heavy use year," improves 2027, neutral 2028, positive free cash 2029+

🏭

Defense Bleeding Cash in Strike

IAM Strike Status: "IAM represented workforce remains on strike," Q3 results had "immaterial impacts" from work stoppage

JDAM Contingency: "Building JDAMs without IAM workforce at about same production rate as before work stoppage"

Development Programs: MQ-25 and T-7A progressing, T-7A achieved "four additional customer milestones under MOA"

2026 Breakeven Risk: Defense needs to "return to historical performance levels," transition to "tighter underwriting standards"

📉

Profitability Still Years Away

Operating Margin: BCA -48.3% impacted by 777X, includes customer concessions, rework costs, learning curve adjustments

737-7/10 Certification: Anti-ice "still on critical path," need hardware and software mods on test aircraft, "following lead of FAA"

Engine Constraints: Must watch "continued demand on engines in forward fit and aftermarket and durability upgrades"

No Long-Term Target: Molavi declined $10B FCF target, "plenty of runway to go as we stabilize and complete development programs"