Boeing 737 MAX Production Delays Hit Share Price

Boeing CEO Kelly Ortberg stated that increasing production of the 737 MAX is taking longer than expected. The company aims to reach a rate of 47 jets per month, but has been unable to produce 737 wings quickly enough to meet this goal.

As a result, Boeing's share price dropped by 2.25% immediately after Ortberg's comments, and closed down 4% for the day. The company's financial recovery is heavily reliant on increasing output of the popular single-aisle jetliner, which has been plagued by crises in recent years.

Ortberg also mentioned that certification of the 737-10, the largest variant of the MAX, is several years behind schedule and makes up about 30% of all 737 orders. Additionally, Boeing's plan to increase production of the 787 Dreamliner to 10 jets per month is being hindered by engine shortages.

The slower rate increases mean that Boeing will likely not meet its target of $3 billion in free cash flow, and instead generate $2 billion, the midpoint of its guidance. Ortberg downplayed expectations that China would make another large order during a meeting between President Donald Trump and Chinese President Xi Jinping next week.