The Boeing (BA) Q3 2026 Earnings Call: Q&A Summary

Q: Myles Walton from Wolfe Research asked for the sizing of customer advances in 2027 and details on the cash flow expansion walk to 2028 and 2029.

A: CFO Jay Malave explained that BCA order deposits in 2027 will be a few billion dollars lower than the record levels of 2026, while CapEx will rise to $5 billion. He added that 2028 and 2029 will benefit from abating legacy drags, higher delivery volumes on positive cash margins, and higher production rates.

Q: Seth Seifman from JPMorgan asked about unit return pressures, supply chain cost growth, rate ramp impacts on unit cash profitability, and pricing timing.

A: CFO Jay Malave noted that BCA margins in the third quarter were impacted by rate adjustments and higher supply chain costs, with abnormal costs on 777 freighter and 767 tanker programs expected to pressure run rates into the first half of the year before abating.

Q: Sheila Kahyaoglu from Jefferies asked how higher fuel prices might affect customer demand, lease rates, and the assumptions underlying long-term free cash flow guidance.

A: CEO Kelly Ortberg responded that while growth might soften, a large portion of the backlog is for fuel-efficient replacement aircraft where demand remains strong, giving Boeing flexibility to reshuffle order delivery sequences if needed.

Q: David Strauss from Wells Fargo asked for specific delivery assumptions for the MAX and 787 in 2027, including inventory liquidation, and the impact of potential 777X certification delays on the $3 billion cash guide.

A: CFO Jay Malave stated that approximately 30 prebuilt minus 7 and minus 10 aircraft will be delivered next year, total BCA deliveries will be up 10% plus, and a slight slip in 777X certification of a month or two could be absorbed within the $3 billion guide.

Q: Scott Mikus from Melius Research asked why it will take roughly two years to move from late next year's rate 52 target on the 737 to the higher rates contemplated in 2029.

A: CFO Jay Malave clarified that deliveries lag production and the gap represents upside opportunity to exceed the $10 billion target if higher production rates are sustained.

Q: Doug Harned from Bernstein asked if wing drilling and supply chain issues are resolved and what is needed to get comfortable with the rate 52 ramp next year.

A: CEO Kelly Ortberg explained that some wing back shop flow enablers failed to yield savings, prompting added capacity and a slower ramp to ensure stability before advancing to rate 52 in the back half of 2027.

Q: Peter Arment from Baird asked for an update on the Spirit integration in Wichita and the slope of BCA margin recovery toward 2029.

A: CEO Kelly Ortberg noted that Wichita integration is proceeding according to plan with a focus on safety and quality systems. CFO Jay Malave added that by 2029, 787 margins will exceed 2018 levels while 737 margins will not fully reach 2018 percentages or absolute amounts.

Q: Noah Poponak from Goldman Sachs asked about capital expenditure levels for 2028 and 2029, and whether another slide in the 777X schedule would significantly impact cash flow.

A: CFO Jay Malave stated that CapEx will normalize to around $4 billion annually in 2028 and 2029 (or 3% to 4% of revenue), and reiterated that a minor 777X delay of a month or two is factored into their conservative provisioning.

Q: John Godyn from Citi asked whether the ultimate earnings power and North Star free cash flow number beyond 2029 has changed or merely shifted to the right by a year.

A: CEO Kelly Ortberg and CFO Jay Malave confirmed that expectations regarding the absolute endpoint and slope have not fundamentally changed, viewing the trajectory as a one-year shift to the right with continued runway beyond 2029.

Q: Ron Epstein from Bank of America asked how major franchise wins like FAXX impact BDS revenue growth, margin performance, and contract types.

A: CEO Kelly Ortberg stated that BDS revenue growth expectations have shifted from low single-digit to middle single-digit or higher, backed by appropriate contract structures and resolved development challenges like Starliner.

Q: Gavin Parsons from UBS asked about the status of a potential new single-aisle aircraft and whether higher R&D or CapEx is assumed in the 2029 cash guide.

A: CEO Kelly Ortberg stated there is no change in outlook for a new airplane with a product development team studying market timing, and CFO Jay Malave added that required investments are contemplated within the cash outlook.

Q: Gautam Khanna from TD Cowen asked about the trajectory of deferred production balances across commercial programs.

A: CFO Jay Malave answered that deferred production for the 737 and 787 will flatten out next year and become significant sources of cash driving working capital in 2028 and 2029, while 777X balances will grow as early deliveries ramp up.

Q: Robert Stallard from Vertical Research Partners asked what specifically changed in management's outlook to provide the multiyear free cash flow guidance now.

A: CEO Kelly Ortberg responded that significantly reduced portfolio risk, improved execution on fixed-price development contracts, major franchise wins, and demonstrated progress in commercial factory ramps gave management the confidence to share these targets.