Boeing (NYSE:BA) Co. is maintaining its cash-flow target for this year, aiming to achieve $3 billion to $5 billion, and plans to double this amount by mid-decade, despite manufacturing defects that have led to a cut in the 737 model delivery target. The company's shares surged by 2.9% following this announcement. The delivery target for the carbon-composite 787 Dreamliner remains unchanged.
Investors have been able to overlook the inspections and repairs affecting 737 deliveries due to the company's promising financial outlook. Boeing has revised its delivery goal for this model and now expects to hand over between 375 to 400 units, following last month's warning of deliveries being at the lower end due to a supplier issue.
In response to strong sales, Boeing plans to double the production of the carbon-composite 787 over the next two to three years. Since mid-year, the company has been striving to maintain a production rate of 38 jets per month for the 737 model and aims to finalize this tempo by year-end. To achieve its new 737 target, it needs to deliver around 100 units during Q4.
The company's inconsistent recovery from the pandemic has caused frustrations among investors and customers during a time of high demand for new jets. CEO Dave Calhoun addressed these challenges in a memo, emphasizing the company's duty to perform and address quality issues with its key suppliers.
Despite these efforts, Boeing reported its ninth consecutive loss-making quarter, with an adjusted loss of $3.26 cents a share, worse than the expected shortfall of $2.95 by analysts. This loss was mainly due to supplier issues that led to a drop in 737 deliveries by a third from the previous quarter. Significant losses at the defense subsidiary included a $482 million charge for outfitting the next Air Force One presidential aircraft. The company also experienced a cash burn of $310 million in Q3, while a production glitch was discovered at Spirit AeroSystems (NYSE:SPR).
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