Boeing Commercial Profits Drop Amid Revenue Gains

Boeing's Commercial Airplanes division posted a 3% revenue decline last quarter, a drop that contrasted with a 4% increase in total company revenue. The stock fell just under 11% in trading on Wednesday morning.

The divergence stems from shifting delivery numbers and production constraints. CEO Kelly Ortberg noted the company is working to fill a record backlog, but the pace of delivery for specific aircraft models slowed. The overall revenue figure reached $24.2 billion, up from the same period last year.

In September, Ortberg told an industry conference that stabilizing the 737 MAX line is taking longer than expected. The production rate currently stands at 47 planes per month. Boeing aims to reach 52 planes per month, a target that relies on the certification of the new North Line in Everett.

The Everett facility assembles the 737 MAX 8, 9, and 10. Wings are built in Renton and transported to Everett for final assembly. Ortberg stated that the company needs to stabilize wing and fuselage production in Kansas before it can fully accelerate output.

"I’m expecting it’ll take us into next year to get fully stable at this rate," Ortberg said. "Our output of wings is improving, but we need to demonstrate sustained performance at this level and ensure we have a high confidence plan to step up to rate 52 when the system is ready."

The first 737 MAX 10 rolled off the Everett line on Monday. With the 737 MAX 7 and 10 now certified, Boeing is shifting focus to the 777-9. The company expects the first delivery of that model in 2027. Production for the 777X is currently running at approximately one plane per month.

Commercial Airplanes operating margins improved from last year but remained at negative 6.5%. CFO Jay Malave attributed the margin pressure to lower booking rates and higher supply chain costs. The division holds a record backlog of $612 billion, which includes more than 6,300 planes.

Boeing delivered 124 of the 737 MAX this quarter. Malave said the delay in stabilizing production at 47 planes per month will likely keep the company below its target of 500 deliveries for the year.