Boeing's 777X Woes: A $5bn Blow and What It Means

Boeing is in hot water again. This time, it's because of its 777X jet program. The company has pushed back the first delivery to 2027. This delay is costing them nearly $5 billion. That's a huge hit! But it's not the first time Boeing has faced delays and financial setbacks. The 777X was supposed to be a big deal for Boeing. It's a key part of their long-term plans. But things haven't gone as planned. There have been certification and production delays. These delays have added up to over $15 billion in charges. That's a lot of money! Boeing's CEO, Kelly Ortberg, admitted they are behind schedule. He said there's still a lot of work to do. But he didn't mention any new technical problems. The latest charge includes penalties for late deliveries to customers. Shares of Boeing dropped by 1% in premarket trading. Analysts expected a big charge, but maybe not this big. Richard Aboulafia, from AeroDynamic Advisory, thought it would be between $2 billion and $4 billion. He doesn't think this will cripple Boeing financially. But he does wonder if there are more surprises coming. The delay is happening at a tricky time. Demand for international travel is growing. That means there's a bigger need for widebody aircraft like the 777X. But people might start to lose patience. They might even demand compensation. Boeing has been dealing with other issues too. There have been quality problems and production delays with their 737 MAX. They've been slowly increasing production. Earlier this month, they got approval to increase 737 Max production to 42 jets per month. This is up from a cap of 38 jets per month. Boeing delivered 55 jets in September. That's the best they've done in that month since 2018. It's a big jump from the 33 deliveries they had a year earlier. A strike by factory workers had disrupted production then. Deliveries are important. They show how much revenue and cash flow a company has. Boeing reported a free cash flow of $238 million. That's positive news for the first time since 2023. But there's more to the story. Boeing posted an adjusted loss per share of $7. 47 for the quarter. That's worse than what analysts expected. They thought the loss would be around $4. 59. On the bright side, revenues rose by 30% to $23. 27 billion. That's above what Wall Street expected.