BA 2026 Q3

Management raised its defense revenue growth outlook from low-single-digit to high-middle-single-digit or higher, citing new wins like F/A-XX, NGAD, PAC-3 and F-15EX contracts.

“Clearly, that is going to be more towards the high-middle-single-digit or higher going forward.”— Robert K. Ortberg, President and Chief Executive Officer

737 full-year deliveries are now expected to come in shy of the 500-aircraft target because stabilizing production at rate 47 is taking longer than expected.

“the delay in stability at 47 per month is expected to translate to lower delivery output and come in shy of the 500-delivery target”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

BDS revenue grew 15% to $7.9 billion, driven by higher volume including growth on classified missiles and weapons programs plus a new Spirit AeroSystems contribution.

“Revenue increased 15% to $7.9 billion, driven primarily by higher volume, including growth on classified programs in missiles and weapons.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

BCA revenue declined 3% year over year to $10.7 billion, driven primarily by a less favorable commercial delivery mix versus the prior year.

Per Jesus Malave Jr., Executive Vice President and Chief Financial Officer

Management says the record $745 billion backlog now reflects improved pricing dynamics, underpinning confidence in the multiyear free cash flow trajectory.

“our outlook is supported by a record backlog of $745 billion with improved pricing dynamics”— Robert K. Ortberg, President and Chief Executive Officer

CFO cited cost-based price extensions on a higher-priced backlog as a new factor driving significant BCA margin improvement in the back half of the year.

“the benefit of cost-based extensions at a higher-priced backlog and other performance with the higher volumes”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

Wing back-shop flow improvement enablers failed to yield expected flow savings, delaying 737 rate-47 stability and pushing the rate-52 target out to the back half of 2027.

“Some of those flow enablers just flat out did not yield the flow savings.”— Robert K. Ortberg, President and Chief Executive Officer

BCA backlog rose to a new record of $612 billion with over 6,300 airplanes, boosted by new orders from Turkish Airlines, Ethiopian Airlines, and Lufthansa.

“Backlog at BCA increased again to a new record level of $612 billion.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

BDS backlog reached a record $101 billion after booking $23 billion of orders in the quarter, not yet including the newly won F/A-XX award.

“BDS booked $23 billion in orders during the quarter, with a record backlog of $101 billion.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

787 full-year delivery guidance was narrowed toward the lower end of the prior 90-100 aircraft range due to delays in reaching the rate-10 production target.

“we continue to expect to deliver 90 to 100 airplanes in the year, but expect it to be closer to the lower end”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

A wing-component supplier disruption halted 777 freighter and 767 tanker production; shipments resumed but a production gap will flow through these lines over the next few quarters as abnormal cost.

“there will be a gap in our production system that gradually flows through these production lines over the next few quarters.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

Boeing achieved FAA certification of the 737-7 in July and the 737-10 just last week, completing nearly 100 test flights and over 4,000 hours of testing.

“We received FAA certification for the 737-7 in July and the 737-10 just last week.”— Robert K. Ortberg, President and Chief Executive Officer

777X certification timing has effectively shifted about a year later than originally expected, as full flight-test authorization including ETOPS testing is still pending, though 2027 delivery remains the target.

“I kind of look at it as almost a one-year shift to the right from expectations.”— Robert K. Ortberg, President and Chief Executive Officer

Boeing reached a new path forward with NASA on Starliner that reduces program risk and includes $359 million of additional NASA funding to support future flights.

“worked with NASA on a path forward to support future flights while reducing our program risks, including $359 million of additional funding.”— Robert K. Ortberg, President and Chief Executive Officer

FAA approved incremental 777 freighter production of up to 35 additional units, extending the program's life as the top-selling dedicated freighter.

“received FAA approval for incremental production of up to 35 units, further extending the most popular dedicated freighter of all time.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

Boeing narrowed its range and issued first multiyear free cash flow targets: about $2 billion in 2026, rising to $3 billion in 2027, $6 billion in 2028, and $10 billion in 2029.

“We have narrowed our range and expect to generate approximately $2 billion of free cash flow in 2026.”— Robert K. Ortberg, President and Chief Executive Officer

BCA operating margin of -6.5% improved materially versus a prior year hurt by the 777X charge, but gains were partly offset by lower booking rates from rate adjustments and higher supply chain costs.

“Operating margin of negative 6.5% improved materially versus the prior year's results, which were impacted by the 777X charge.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

Management now expects BCA margins to reach approximately breakeven in early 2028 as current abnormal costs abate through the first half of next year.

“put ourselves in a position to get to about breakeven in early 2028.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

CFO disclosed that 737 margins will ramp but not return to 2018 levels, while 787 margins will exceed 2018 levels on both a percentage and absolute basis by 2029.

“By contrast, the 787 by 2029 will exceed what it was in 2018, both on an absolute basis as well as on a percentage basis.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

CEO expressed markedly greater confidence in BDS margin performance than previously, citing improved contract structuring that reduces risk of cost overruns on fixed-price development programs.

“I feel much, much better about both the growth profile and the margin performance profile.”— Robert K. Ortberg, President and Chief Executive Officer

Consolidated operating margin improved to 1.5%, reflecting higher segment earnings and lower corporate expenses compared to the prior period.

“Operating margin improved to 1.5%, and core earnings per share improved to a loss of $0.34, reflecting higher segment earnings and lower corporate expenses.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

R&D spending will shift away from the 737 and 777X development programs as they wind down, reallocating resources toward new program investments.

“When we finish the 777 program, you will see a shift of resources and spending from those development programs to new programs.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

Boeing's win of the U.S. Navy's F/A-XX sixth-generation fighter program, following its earlier NGAD win, makes it the exclusive sixth-generation fighter supplier to both the Air Force and Navy.

“making Boeing the exclusive sixth-generation fighter company for both the U.S. Air Force and the U.S. Navy.”— Robert K. Ortberg, President and Chief Executive Officer

Management says completing 737-7/-10 certification revealed what is required under the new post-MAX regulatory regime, which it expects will help accelerate 777X certification progress.

“I think we now know, after the -7 and -10, what it takes to get certification complete in this new post-MAX world of regulation.”— Robert K. Ortberg, President and Chief Executive Officer

Boeing completed the sale of HRL Laboratories, generating a $252 million gain that boosted BDS operating margin in the quarter.

Per Jesus Malave Jr., Executive Vice President and Chief Financial Officer

Spirit/Wichita integration ramp was slowed slightly by implementing Boeing's safety and quality plan, though fuselage inventory is burning down faster than the baseline integration plan.

“I would say that has probably slowed them down a little bit as we have implemented some of these safety and quality features.”— Robert K. Ortberg, President and Chief Executive Officer

CapEx is guided structurally higher than the historical ~2% of revenue, rising to about $5 billion in 2027 (up ~$1 billion) and ~$4 billion in 2028-2029, normalizing at 3-4% of revenue including F/A-XX investment.

“3% to 4% is the right way to look at it on a normalized basis out in the future.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

Boeing's Charleston 787 expansion, adding a third final-assembly line, is now expected to bring the majority of new capability online late next year to support higher production rates.

“the majority of the capability to come online late next year.”— Jesus Malave Jr., Executive Vice President and Chief Financial Officer

Management is monitoring higher-for-longer oil prices, noting they may accelerate replacement aircraft demand while potentially softening growth-driven orders, though no softening has yet occurred.

“So far, we have not seen anybody wanting to replan their order growth.”— Robert K. Ortberg, President and Chief Executive Officer