Markets
Boeing Fell 10.7%, Its Worst Day Since June 2020
Boeing fell 10.69% to $168.18 on Tuesday, its worst day since June 2020, after quarterly results pushed its cash-flow recovery back a year. A core loss of $0.34 a share, wider than the $0.21 expected, and a later 737 ramp outweighed a record $745 billion backlog.
Boeing's third-quarter report had a record in it, and the market ignored it. The company said on Tuesday, October 27, that its backlog reached $745.4 billion, including more than 6,300 commercial airplanes, up from $682.2 billion at the end of 2025. The shares then fell 10.69% to $168.18, their steepest one-day fall since June 2020, and took about 120 points off the Dow, which closed up just 0.03% on a day the Nasdaq gained 1.18%.
The quarter itself was mixed. Revenue rose 4% to $24.19 billion, roughly in line with forecasts, and deliveries edged up to 161 from 160. The net loss narrowed to $116 million, or $0.26 a share, from $5.3 billion a year earlier, when Boeing took a $4.9 billion charge on the 777X. But the core loss, the figure analysts follow, was $0.34 a share against about $0.21 expected, and the commercial airplanes unit's operating margin worsened to minus 6.5% from minus 2.7% in the second quarter. Boeing's filing blamed a less favourable mix of deliveries, higher expected costs for future production-rate changes and higher supply-chain costs; Yahoo Finance's coverage cited a charge of about $700 million on the 777X programme.
The cash numbers were better than the margins. Operating cash flow was $1.5 billion and free cash flow $464 million, positive for a second quarter, while cash and securities rose to $20.7 billion against $45.9 billion of debt. The defence business, which has been the company's problem for years, grew revenue 15% to $7.94 billion with a 6.2% margin, helped by a $252 million gain on the sale of HRL Laboratories. Boeing also paid about $0.7 billion in Justice Department settlement payments during the quarter.
What the market sold was the timetable. According to a market summary based on Bloomberg and Reuters reports, Boeing now expects free cash flow of about $2 billion this year and $3 billion in 2027, far short of the roughly $5.5 billion analysts expected for next year, and its $10 billion cash-flow goal slipped to 2029. The 737 is now expected to stabilise at 47 a month from early 2027, later than the summer-2026 plan, before rising to 52 in the second half of 2027. The 777X, already years late, is due to be certified in 2027 with 10 to 15 deliveries that year.
A backlog that large is a promise of revenue, not of profit. Many of those orders were priced years ago, before the inflation in parts and labour that is now eating into each delivery, and every month the production ramp slips is a month of fixed costs spread over fewer aircraft. Tuesday's fall shows how the market weighs the two: a record order book is worth less than one year's delay in turning it into cash. The next tests are the monthly delivery figures and any comment from the FAA on the 737 rate increase.