Boeing Cuts Q3 Loss to $116 Million as Defense Sales Jump 15%

Boeing cut its third-quarter net loss to $116 million, down from a $5.34 billion loss a year earlier, as defense revenue jumped 15% and quarterly deliveries edged higher. The plane maker posted adjusted losses of 34 cents per share, wider than the 21-cent loss Wall Street expected, while revenue of $24.19 billion beat the $23.84 billion consensus from LSEG. Revenue climbed 4% year over year.

For the three months ended Sept. 30, the company reported a net loss of 26 cents a share on an unadjusted basis, compared with $7.14 per share in the same quarter last year — a period that included a nearly $5 billion charge on the long-delayed 777X program.

By Amara Osei

What drove the numbers?

The defense business carried the quarter. Its revenue rose 15% from a year earlier to $7.94 billion, offsetting weakness in the commercial aircraft unit, where revenue fell 3% to $10.72 billion.

The commercial unit posted a negative operating margin of 6.5%. Boeing blamed a "less favorable delivery mix, higher projected costs associated with future production rate adjustments and higher estimated supply chain costs."

On the delivery side, Boeing handed over 161 commercial airplanes in the quarter, one more jet than a year earlier. Deliveries matter because the bulk of an aircraft's price is paid when the customer receives the plane.

What did Kelly Ortberg say?

CEO Kelly Ortberg struck a measured tone. He told staff the manufacturer has "more work to do," while pressing for higher standards as the company's recovery takes shape.

"Looking ahead, expectations are rising, and they should," Ortberg said in a note to staff on Tuesday. "That means elevating our performance through lean, productivity and efficiency improvements in our day-to-day work while upholding our high levels of safety and quality."

On production, Ortberg told investors last month that output of the 737 Max is taking "a little bit longer" than expected to stabilize. Boeing has been building about 47 of the jets a month and expects to increase output next year.

What's next for investors?

Executives will update investors on how quickly Boeing can raise production in the coming months when it holds its quarterly earnings call Tuesday at 10:30 a.m. ET. Production rates are the central question for the recovery: faster output means faster cash, since payments arrive at delivery.

The quarter also brought two wins that executives can point to. The U.S. Navy tapped Boeing to develop its next-generation fighter jet. And the Federal Aviation Administration signed off on the 737 Max 10 last week, the largest variant in the Max family, following certification of the 737 Max 7 in August — the final approvals for the aircraft line.

With defense growing, the Max line fully certified and 737 output set to rise next year, Boeing heads into the call with momentum. The adjusted loss, though, shows the margin repair Ortberg keeps promising hasn't landed yet.