Boeing reported third-quarter earnings on Wednesday, and whoa nellie! The aviation giant booked a huge loss — almost $5 billion — related to continuing delays to its 777X plane, with first deliveries now pushed to 2027. The scale of the hit surprised Wall Street, which was expecting something big but not quite that big. Here’s Boeing CEO Kelly Ortberg, from the company’s press release:
“While we are disappointed in the 777X schedule delay, the airplane continues to perform well in flight testing, and we remain focused on the work ahead to complete our development programs and stabilize our operations in order to fully recover our company’s performance and restore trust with all of our stakeholders.”
Reuters reported that analysts anticipated a one-time loss in the $2-$4B ballpark, so the larger 777X charge raised Boeing’s overall negative result for the quarter to a pretty dizzying $5.3 billion. The plane is legit taking forever: it was announced in 2013 and originally slated to go to customers in 2020.
Why is the 777X so late?
The flagship wide body has been slowed by issues with its massive GE engines and its innovative folding wingtip design, as well as COVID-related supply chain snarls that have interfered with the certification process. There are actually two variants, the 777-8 and the 777-9, and Boeing is testing the patience of carriers such as Lufthansa, which wants the big jet to replace older and less fuel-efficient planes that it continues to fly. (The 777-9 will be certified first.)
Ortberg hasn’t exactly been sugarcoating the difficulties of getting the plane certified. In September, he came clean with investors and revealed that the 777X is a long way from being ready for prime time. That was strategic on his part: he telegraphed the bad news, and then Boeing elected to absorb the financial impact all at once, rather than spreading it out over multiple quarters. That doesn’t mean they won’t have to keep talking about it, however. Investors aren’t going to forget about $5 billion.
Not all bad news at Boeing
The 777X delays and cost overruns are embarrassing for Boeing, but the news isn’t all bad. The cash-cow 737 has been cleared by the federal government for increased production after a door plug blew out in early 2024 and prompted an investigation into an aircraft that was already embattled due to a pair of fatal crashes. The New York Times reported that Ortberg expects two variants, the 737 Max 7 and Max 10, to be certified in 2026. And Boeing said that it had “stabilized” production of the 787, following what the AP termed a “string of setbacks” in the manufacturing of the Dreamliner.
These are not great days for Boeing. The 737, 787, and 777 programs have all struggled, and while it looks as though Ortberg is in the initial stages of a turnaround, he has literally years to go before he can say the ship is fully course-corrected. Encouragingly, Boeing did $23 billion in revenue for the third quarter, beating expectations, and delivered 160 aircraft to commercial customers. The goal now is to avoid any additional delays and major charge-offs that could undermine the company’s somewhat improving progress.
