SEATTLE (Oct 27): Boeing chief executive officer Kelly Ortberg said on Tuesday that the company will not reach its 737 production rate target of 47 jets a month until next year, a serious setback to the company's ongoing recovery.

The company had planned to reach the target this past summer, but it will take "into early next year", Ortberg said during an interview on CNBC.

In September, he said that Boeing has not been able to make wings fast enough.

Deliveries of the popular single-aisle jetliner are a major driver of Boeing's cash flow.

Shares of the US plane-maker fell 5% in early trading even as Boeing continues to recover from years of crises and controversies that dented its reputation, drained cash and saddled it with a heavy debt load.

"We are ramping up aircraft, and we are doing that in the right way," he said.

Before Ortberg joined Boeing in 2024, the company had struggled for years with production quality problems that were attributed to rushing rate increases at the expense of quality.

There is pressure on the company to increase 737 output faster, "but we are going to be smart about this, stay disciplined, and the outlook is there", Ortberg said.

The company continues to struggle with production challenges in its 787 programme and 777 freighters, as first reported by Reuters on Friday.

High fuel prices have kept demand up for more fuel-efficient jetliners, but "certainly something we have to continue to watch", Ortberg said on CNBC.

During the quarter, Boeing secured certification for the 737 MAX 7 from US regulators, won the US Navy's sixth-generation F/A-XX fighter contract and generated free cash flow for another quarter, while certification of the larger MAX 10 followed in October.

"Expectations are rising, and they should. We have a stronger foundation than a year ago, but we also have more work to do to deliver on our backlog, strengthen our culture, and improve how we work every day," Ortberg said in a memo to employees after the results.

Boeing reported an adjusted loss of 34 cents per share for the quarter through September, compared with market expectation of 21 cents, according to data compiled by LSEG.

Revenue at Boeing Commercial Airplanes dipped slightly to US$10.7 billion (RM43.7 billion), while operating loss stood at US$697 million and margin shrank by just 6.5% compared with a contraction of 48.3% a year ago.

The company attributed the performance to less profitable jetliner deliveries and higher production costs, including from its supply chain.

At Boeing's defense division, higher deliveries, improved operational performance and a US$252 million sale of a subsidiary contributed to nearly US$500 million in quarterly earnings with an operating margin of 6.2%, up from 1.7% a year ago.

Boeing Global Services earned US$1 billion and posted an operating margin of 18.3%.

The US plane-maker ended the quarter with US$25.2 billion in net debt, down slightly from US$25.9 billion in the previous three months and US$30.4 billion a year ago.

Uploaded by Tham Yek Lee