Boeing shares drop 3.3 percent amid 777X delays

Boeing reported a $5.4 billion loss in the third quarter as costs linked to the delayed certification of its 777X jet weighed heavily on its financial results.

The company posted $23.3 billion in revenue, a 30 percent increase from the same period last year, boosted by higher commercial plane deliveries.

However, the gains were offset by a one-time $4.9 billion charge related to the 777X program, which has faced ongoing delays in securing approval from the Federal Aviation Administration. Boeing now expects certification flights to start in 2027, later than originally planned, as the company completes additional analysis and preparatory work.

CEO Kelly Ortberg highlighted the FAA’s October approval to increase monthly production of the 737 MAX as a positive development and pointed out that Boeing generated positive free cash flow during the quarter. He added that work remains to stabilize operations and regain trust after previous safety issues, including the two fatal 737 MAX crashes.

"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," Ortberg said.

Under the latest timeline, commercial deliveries of the 777X are now set for 2027, delayed from 2026. CFO Jay Malave said the program will initially be a cash drain but is expected to turn positive by 2029 as production ramps up. The 777X has already accumulated a $6.5 billion charge in 2020 due to FAA delays and weaker airline demand during the pandemic.

Ortberg explained that the certification delays stem from additional FAA requirements and paperwork. "I think the flight testing should go reasonably quickly," he said, adding that the analysis and approval process has required more time than expected.

The company is also navigating challenges from a strike at its St. Louis defense operation, where more than 3,000 workers rejected Boeing’s latest contract offer. Ortberg said production continues at roughly the same level while the company recruits replacement workers and allows some employees to cross the picket line. Union leaders warned that replacing skilled workers poses risks, emphasizing the precision and complexity of Boeing products.

Shares of Boeing fell 3.3 percent in afternoon trading.