The skies are clearing for Boeing. But a $5 billion hit has the stock grounded

Boeing on Wednesday reported rising revenue, lower losses, and positive free cash flow in its third quarter. Still, a fresh, almost $5 billion charge in relation to its delayed 777X jet suggests that the company’s long-promised turnaround remains a work in progress — as if the skies are clearing, but not yet quite clear.

Top-line revenue rose 30% over last year to more than $23 billion, driven by strong commercial deliveries — the company’s highest quarterly total since 2018. The plane maker also generated more than $238 million in free cash flow, a sharp upward turn from last year’s $2 billion negative free cash flow.

But even amid these gains, Boeing still posted a net GAAP loss exceeding $5 billion, or about $7 per share.

What’s troubling Boeing now

The biggest hit came from the 777X, Boeing’s delayed wide-body flagship, whose certification is now expected in 2027. The company said the new timeline forced the pre-tax charge, erasing much of the quarter’s progress. Thus its Commercial Airplanes division delivered very strong top-line growth — revenue up almost 50% to $11.1 billion — even as it remained deep in the red, with a painful 48% negative margin.

Defense, Space & Security fared better, returning to profitability with a scant 1.7% margin and $6.9 billion in revenue. Meanwhile, Global Services continued to shine with 17.5% margins on $5.4 billion in sales. The company’s total backlog swelled to a record $636 billion, including more than 5,900 airplanes.

CEO Kelly Ortberg said Boeing’s focus on “safety and quality” was producing results, noting the 737 Max line has stabilized at 38 planes per month, with the FAA approving an increase to 42 per month in October. But Ortberg also acknowledged disappointment with the 777X setback and reiterated Boeing’s goal of “restoring trust with all of our stakeholders” in order to "fully recover."

Restoring trust? That may be the tallest order yet

The earnings release arrived as Boeing contends with a machinists’ strike within its Defense unit entering its grueling fourth month, not to mention lingering skepticism from a Wall Street weary of repeated turnaround promises. Debt remains heavy at $53.4 billion, or more than double on-hand cash and securities totaling $23 billion.

Boeing stock edged down about 1% before Wednesday’s market open as investors eyeballed the numbers without apparent enthusiasm. The return to positive cash flow is all well and good — surely an "important milestone," as Ortberg put it. But the company still looks to be experiencing turbulence.