Boeing shares rose almost 9% in intraday trading on Tuesday (December 2), as the company’s CFO delivered positive news on jet deliveries and free cash flow.
Speaking at the UBS Global Industrials & Transportation Conference in Miami, CFO Jay Malave said the OEM is “absolutely” expecting deliveries of its key models to be higher in Q1 next year.
“Big picture, we expect deliveries both on the 737 and the 787 to grow, in spite of the fact that we have less aircraft coming out of inventory to be delivered,” he said.
Malave confirmed that Boeing has substantially reduced its stockpile of deliverable aircraft, meaning that future delivery growth will come from higher production rates rather than drawing on stored jets.
“When you now fast forward to 2026, we're going to be increasing our deliveries, but there won't be hardly any aircraft, if any at all, that will be coming out of inventory,” he said.
The CFO warned that the 737-10 is likely to create a “little bit of difference” between production and deliveries rates in 2026, since the aircraft type is not expected to be certified until later in the year.
As such, Boeing is unlikely to deliver all of the 737-10s that it produces during 2026, but Malave said this is “just because of the timing of the certification process”.
The CFO also had significant news to share on free cash flow, which has swung erratically from negative to positive and back again since 2019, following the grounding of the 737 MAX.
“We absolutely expect to grow year over year in cash flow,” he said. “What we expect is in low single digits [billions] in terms of positive free cash flow, which I think is pretty substantial growth year over year.”
In the long term, Malave said he is “very comfortable” in saying that Boeing can return to delivering $10bn in positive free cash flow, as it has in previous years.
However, this will depend on certifications coming in on time, commercial aviation deliveries rising as expected, and improving margins at Boeing’s defence unit.
“All of those taken together will be the drivers and enablers of this $10bn cash flow generation mark that we've talked about in the past,” he said. “And it's all very doable."