According to CNBC, Boeing shares declined 4% Wednesday despite reporting 30% year-over-year revenue growth to $23.27 billion, beating expectations of $21.97 billion. The company posted a $7.47 per share loss, significantly worse than the $4.59 loss analysts expected, driven by a larger-than-anticipated $4.9 billion charge related to 777X program delays that pushed first delivery to 2027. However, Boeing achieved positive free cash flow ahead of schedule and saw commercial airplane deliveries jump 38% to their highest quarterly total since 2018, with the FAA recently authorizing increased 737 production to 42 planes monthly. Jim Cramer’s Charitable Trust maintained its buy rating with a $275 price target, viewing the dip as a buying opportunity despite the headline losses.
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The Free Cash Flow Turning Point
What makes Boeing’s positive free cash flow achievement particularly significant isn’t just that it arrived a quarter early—it’s that this metric represents the company’s ability to fund its own recovery without additional borrowing. For an industrial manufacturer with Boeing’s scale, positive free cash flow means the operational improvements are translating directly to financial health. The company can now begin addressing its substantial debt load while simultaneously funding the R&D needed to complete certification programs. This creates a virtuous cycle where improved operations lead to better cash flow, which enables further operational improvements.
The Delicate Production Balancing Act
The FAA’s approval to increase 737 production to 42 planes monthly represents both opportunity and peril. Boeing’s management emphasized they’ll ramp “slowly over time as key performance indicators dictate,” which suggests they’ve learned from past quality control issues. The aerospace industry operates on razor-thin margins for error—a single production misstep can ground entire fleets and trigger regulatory scrutiny that costs billions. While the increased rate will help convert the massive $636 billion backlog into revenue, Boeing must demonstrate it can maintain quality standards while accelerating output. The market will be watching early 2024 delivery numbers closely for any signs of strain.
The 777X Certification Marathon
The flight test program for the 777X has accumulated over 4,000 hours—more than double typical programs—highlighting the unprecedented regulatory scrutiny Boeing faces post-737 MAX crises. While management reports “no major technical issues,” the extended timeline to 2027 reflects a new reality in aerospace certification. Regulators worldwide are applying extra caution, particularly for derivative aircraft that push technological boundaries. This creates a competitive window for Airbus to solidify its A350 market position while Boeing works through certification. The 777X’s eventual success depends not just on technical performance but on Boeing’s ability to rebuild trust with global aviation authorities.
Geopolitical Tailwinds and Risks
Cramer’s thesis about Boeing benefiting from U.S. trade policy deserves critical examination. While international orders have indeed flowed as countries seek to balance trade relationships, this creates concentration risk. A change in administration or trade policy could quickly reverse these advantages. Additionally, Boeing’s reliance on international sales makes it vulnerable to global economic slowdowns and currency fluctuations. The company’s diversified defense and services segments provide some insulation, but commercial aerospace remains the primary driver. Investors should monitor order patterns from key international markets and watch for any shifts in U.S. trade diplomacy that could affect Boeing’s competitive positioning against Airbus.
Realistic Recovery Timeline
Looking beyond the quarterly noise, Boeing’s path to sustained recovery requires hitting several milestones: maintaining quality through production increases, successfully certifying the 777X without additional major charges, and converting the massive backlog at improving margins. The stock’s 20% year-to-date gain despite Wednesday’s drop suggests the market sees this progression. However, investors should expect volatility around each quarterly report as Boeing works through its challenges. The $275 price target implies significant confidence in execution over the next 12-18 months. For that to materialize, Boeing needs to demonstrate consistent operational improvements quarter after quarter, not just occasional bright spots.
