Boeing will miss its 2026 target of about 500 737 deliveries

Boeing reported third-quarter results on Tuesday and told investors two things airlines and suppliers had been waiting to hear. The 737 program will not hit its 2026 delivery target of about 500 jets, and the production rate of 47 a month that executives had expected by summer now arrives in early 2027. Shares fell about 9% in afternoon trading, which Reuters called the stock's worst day in more than 18 months.

The quarter itself was not the problem. The outlook was.

The numbers

Revenue was $24.2 billion, up 4% from a year earlier, and nine-month revenue reached $71.0 billion, up 8%. The core loss per share was 34 cents, with a GAAP loss of 26 cents. Analysts polled by LSEG had expected a 21-cent core loss, according to Reuters. Operating cash flow was $1.5 billion and free cash flow was $464 million for the quarter, the second straight positive quarter. Free cash flow for the nine months is still negative at $359 million.

Boeing delivered 161 commercial airplanes in the quarter, one more than a year ago: 124 of them 737s and 22 of them 787s. Through nine months it has delivered 475 airplanes, 367 of them 737s, against 440 in the same period of 2025. That 367 is the fastest nine-month MAX pace the company has posted, which is why the miss on 500 stings. Getting there would have taken roughly 133 more in the fourth quarter.

Why 47 a month slipped

CEO Kelly Ortberg said it is taking longer than expected to prove the 737 line can hold a stable rate of 47. Reuters reports wing production remains the main constraint and that higher production costs, including supply chain costs, weighed on the quarter. MoneyCheck cites engine supply as another drag. Ortberg said the company would stay disciplined on 737 output despite pressure to go faster, and in a staff memo said expectations are rising and the company still has work to do.

The next step, 52 a month, is now planned for the second half of 2027. On the widebody side, the 787 is holding at eight a month rather than the ten that had been planned, and the company's full-year 787 deliveries are expected at the low end of its 90 to 100 range. The 777-9 is expected to be certified by mid-2027.

For airlines planning 2027 schedules, that is the operative detail. Every month of delay at 47 is dozens of narrowbodies that do not show up when a fleet plan said they would, and the lessors and carriers that have been waiting since 2024 will be revising again.

Cash comes a year later

Boeing now expects about $3 billion of free cash flow next year, a year later than it had planned, per Reuters. Analysts had been modeling $5.5 billion, according to LSEG data. Net debt ended the quarter near $25.2 billion, down from $30.4 billion a year earlier, so the balance sheet is moving the right way. The pace is just slower than the Street wanted.

Defense and services carried the quarter

Commercial Airplanes revenue slipped 3% to $10.7 billion with an operating loss of $697 million, a margin of negative 6.5%. That compares with negative 48.3% a year ago, when a machinists' strike shut the factories. Defense, Space and Security revenue rose 15% to $7.9 billion with earnings of $492 million, a 6.2% margin that includes a $252 million gain on the sale of HRL Laboratories, and the unit's backlog hit a record $101 billion. Global Services posted $5.6 billion in revenue and $1.0 billion in earnings, an 18.3% margin.

The quarter also brought three milestones the company wanted on the record: the 737-7 received its amended type certificate, the 737-10 was certified in October, and the U.S. Navy picked Boeing for its sixth-generation F/A-XX fighter.

The backlog is the other half of the story

Total backlog reached a record $745.4 billion at the end of September. The commercial portion is $611.8 billion and covers more than 6,300 airplanes. Demand is not the constraint. The factory is.

That is why the market reaction was so sharp on what was, by the raw numbers, a better quarter than last year's. The Associated Press reported the stock down 9.4% in midday trading on the same day JetBlue jumped nearly 19% and Royal Caribbean rose more than 8%. Investors were paying for the rate ramp, and the rate ramp moved.

For suppliers, the message is to plan on 38 to 42 a month of real pull-through for the rest of this year, not 47, and to treat the second-half-2027 target of 52 as the next date to pressure-test. For airlines, the delivery conversations that were supposed to end this summer are going to run into next spring.