波音 2026 年第三季法說會摘要

波音 (NYSE: BA) 公布 2026 年第三季合併營收成長、營運獲利能力改善且自由現金流轉正。管理層亦提出多年期自由現金流目標架構，在商用客機交付量增加、專案利潤率提升，以及國防、太空與安全部門與全球服務部門成長的支撐下，預計 2029 年自由現金流將達到約 100 億美元。

核心要點

• 第三季營收年增 4% 至 242 億美元。營運利潤率提升至 1.5%，核心每股盈餘仍為負值，為 -$0.34。
• 儘管支付了約 7 億美元的美國司法部和解金以及預定的產能投資，自由現金流仍達到 4.64 億美元。
• 波音交付了 161 架商用飛機，其中包括 124 架 737 和 22 架 787。此總量創下該公司自 2018 年以來最高單季商用交付量。
• 管理層預計 2026 年自由現金流約為 20 億美元，2027 年升至約 30 億美元，2028 年達 60 億美元，2029 年達 100 億美元。
• 737-7 與 737-10 已取得美國聯邦航空總署 (FAA) 認證。波音仍預計於 2027 年進行首架 777-9 交付，儘管仍需進一步的飛行測試授權。
• 波音本季結束時的在手訂單達創紀錄的 7,450 億美元。其中商用飛機部門佔 6,120 億美元，國防、太空與安全部門達 1,010 億美元。

核心財務數據

業務與營運表現

商用飛機部門

波音商用飛機部門交付了 161 架飛機，創造 107 億美元營收。其在手訂單升至創紀錄的 6,120 億美元，代表超過 6,300 架飛機，其中包括土耳其航空 (Turkish Airlines)、衣索比亞航空 (Ethiopian Airlines) 和漢莎航空 (Lufthansa) 的訂單。

波音在本季交付了 124 架 737 飛機。管理層表示，將產能穩定在每月 47 架的進度有所延遲，導致全年交付量將低於先前 500 架的目標。公司預計生產穩定在該速率的情況將延續至 2027 年，並以 2027 年下半年達到每月 52 架為目標。

機翼生產仍是 737 生產體系的主要瓶頸。波音正擴充產能並修正未達到預期流程效益的製程改善方案。在公司將系統同步推進至每月 52 架之前，機身產能也需要提升。管理層指出，引擎並非此生產考量中的限制因素。

787 專案保持穩定，月產量維持在 8 架，當季交付 22 架。波音仍計劃於 2026 年開始向每月 10 架過渡，儘管座椅認證問題導致交付時間不均勻，且引擎交付仍是決定進度的關鍵。查爾斯頓 (Charleston) 廠區擴建正進行中，預計大部分新增產能將於 2027 年底上線。

至於 777X，管理層持續預期於 2027 年進行首次交付。目前產能約為每月 1 架，預計 2027 年大部分時間將維持在該水準附近。波音仍需獲得授權才能啟動剩餘的飛行測試計畫，包括 ETOPS 測試。

國防、太空與安全部門

在機密專案、飛彈與武器的帶動下，BDS 營收成長 15% 至 79 億美元。Spirit 貢獻了約 1.6 億美元的單季銷售額。該部門新接訂單達 230 億美元，本季結束時的在手訂單達創紀錄的 1,010 億美元。

波音獲美國海軍選中參與 FAXX 下一代戰鬥機專案。在來源選擇與評估程序完成前，該合約尚未計入第三季的在手訂單。管理層亦特別提到一份為期七年的 PAC-3 尋標器合約，以及追加 22 架 F-15EX 戰鬥機的訂單，使簽約總數達到 120 架。

管理層預計 BDS 營收成長將向中個位數百分比或更高水準靠攏，並繼續以在本十年末達到高個位數百分比的營運利潤率為目標。波音表示，F-47 合約採用成本加成方式，而 FAXX 專案則採用管理層所稱的合適合約結構。

全球服務部門

BGS 營收成長 4% 至 56 億美元，扣除數位航空解決方案 (Digital Aviation Solutions) 剝離案後則成長 11%。營運利潤率達到 18.3%，商用與政府服務均實現雙位數利潤率。該部門獲得 50 億美元訂單，本季結束時在手訂單達 330 億美元。

管理層指引

管理層將 2026 年自由現金流預期收窄至約 20 億美元。此預估前提為收到 KC-46A 加油機 Lot 13 預付金，以及季節性營運資金效益。

該公司的多年期自由現金流目標如下：

2027 年目標假設 777X 於年中取得認證。管理層預期商用客機交付量提升、737 與 787 現金利潤率略有改善、BDS 持續改善以及 BGS 穩定成長。這些有利因素預計將部分被商用客機客戶預付款減少、歷史遺留現金流出以及約 50 億美元的資本支出所抵銷。

2028 年與 2029 年的資本支出預計均在 40 億美元左右。管理層表示，長期常態化水準維持在營收的 3% 至 4% 左右是合適的。

到 2029 年，波音的自由現金流架構假設 737 月交付量達到 50 架中後段、787 月交付量約為 12 架，且 777X 產生正向現金流。管理層指出，隨著交付量和利潤率持續改善，自由現金流仍有超越 100 億美元目標的成長潛力。

針對 2026 年，波音繼續預期 787 交付量為 90 至 100 架，但目前預估結果將接近該區間的低端。2027 年 BCA 總交付量預計將成長 10% 以上，專案層面的細節將於日後公布。

風險與值得關注之處

• 737 生產體系尚未展現出穩定維持在每月 47 架的能力。機翼產量以及隨後的機身提產，是提升至 52 架的主要前提條件。
• 座椅認證挑戰正影響 787 的交付時程，而引擎供應仍是計畫提產進度的關鍵掌控因素。
• 777X 需要獲得額外的美聯航總署 (FAA) 飛行測試授權。2027 年自由現金流計畫假設於年中取得認證，不過管理層正在努力爭取更早達成。
• 機翼零部件供應商的中斷影響了 777 貨機與 767 加油機產線。波音預計在影響消退前的未來幾個季度將出現異常成本。
• 與 2026 年極強勁的訂單環境相比，BCA 客戶預付款減少可能會使 2027 年現金流減少數十億美元。
• 管理層正在關注高企的油價。波音尚未發現客戶修改訂購計畫，但如果高油價持續存在，航空公司的成長需求可能會趨緩。

分析師問答亮點

管理層表示，777X 認證與交付延遲一兩個月，可以在 2027 年約 30 億美元的自由現金流目標內吸收。波音預計該年將交付約 10 至 15 架 777X，並計畫交付約 30 架先前製造的 737-7 和 737-10 飛機。

在商用飛機利潤率方面，管理層表示較高的供應鏈成本與產量速率調整已反映在其現金流預測中。預計 BCA 將在 2028 年初接近營運利潤率損益兩平。到 2029 年，管理層預計 787 在百分比和絕對值上均將超越其 2018 年的利潤率表現，而 737 則預計不會回到 2018 年的水準。

管理層將新的自由現金流軌跡描述為時間軸大約往後延展一年，而非波音長期獲利潛力的改變。管理層指出了研發專案風險降低、商用飛機生產復甦、國防合約結構改善以及贏得重大戰鬥機專案，作為提供多年期目標的依據。

完整法說會逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Thank you for standing by. Good day, everyone, and welcome to the Boeing Company's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's call is being recorded. The management discussion and slide presentation, plus the analyst question-and-answer session are being broadcast live over the Internet. [Operator Instructions]

At this time, I'll turn the call over to Mr. Eric Hill, Vice President of Investor Relations for opening remarks and introductions. Mr. Hill, please go ahead.

Eric Hill

Thank you, and good morning. Welcome to Boeing's quarterly earnings call. With me today are Kelly Ortberg, Boeing's President and Chief Executive Officer; and Jay Malave, Boeing's Executive Vice President and Chief Financial Officer. This quarter's webcast, earnings release and presentation, which include relevant disclosures and non-GAAP reconciliations are available on our website.

Today's discussion includes forward-looking statements that are subject to risks and uncertainties, including the ones described in our SEC filings. As always, we will leave time at the end of the call for analyst questions.

With that, I will turn the call over to Kelly Ortberg.

Robert Ortberg

Well, thanks, Eric, and good morning, everyone. Thanks for joining in today's call. As we enter the final months of the year, we're continuing to make progress across our businesses, having completed many of the key milestones in our 2026 plan and building on the trust we've restored with our stakeholders.

Through the third quarter, we delivered 161 commercial aircraft, the most since 2018. We received FAA certification for the 737-7 in July, and the 737-10 just last week. We reached a new 4-year agreement with Union representing our engineering and technical workforce in the Pacific Northwest avoiding any work interruption. And we secured major program awards across our defense and space portfolio, including multibillion-dollar contracts on key programs like the PAC-3 and the F-15EX. And we scored a generational win with the U.S. Navy when they selected Boeing to design, build and deliver its sixth generation fighter jet, making Boeing the exclusive sixth-generation fighter company for both the U.S. Air Force and the U.S. Navy.

These accomplishments reflect the significant progress we're making and they're made possible by the sustained focus of our team on safety, quality and performance. We know there's more work to do, and I've said before, our progress is not always going to be perfectly linear, but we continue to improve, and I'm confident we are on the right track. I'll touch on the highlights I just shared as well as areas that require more attention in the quarters ahead, and let's start with our development programs.

All year, we said that certifying our new aircraft models is one of our most important goals. The FAA certification of the 737-7 and the -10 represents the culmination of nearly 1,500 test flights and more than 4,000 hours of ground and flight testing. And I want to thank our employees who worked on or supported these programs and never lost sight of our mission; and to our customers and partners, I extend my gratitude for the steadfast support and confidence in these airplanes. And we look forward to the newest members of the 737 MAX family, delivering on their promise of greater efficiency and more capability.

With the 737-7 and -10 FAA certification were complete, our focus now centered squarely on the 777-9. We continue to make progress on flight testing and still need approval to begin the balance of the flight test program, including ETOPS testing. We continue to expect first delivery in 2027 and all of our latest assumptions continue to be within the EAC we reset last year.

Turning now to our commercial factories. On 737, we continue to work towards stabilizing production at 47 airplanes per month. Our factory key performance indicators are performing well particularly in the final assembly, where we've seen a 40% improvement in rework since the start of last year. However, as I mentioned at a conference last month, it is taking us longer than we had expected to demonstrate performance at rate 47. We're making progress, but we still have more work to do, and I'm expecting it will take us into next year to get fully stable at this rate.

Our output of wings is improving, but we need to demonstrate sustained performance at this level and ensure we have a high confidence plan to step up to rate 52 when the system is ready. To reach 52 aircraft per month, we have to get the North Line certified and producing our back shops, including wings, stable and ready and fuselages in which to stable at the higher rates.

Taken together and integrating our learning from this year, our financial plan will target rate 52 in the back half of 2027. And as I've said many times before, it's more important that we do this ramp right than what particular month we achieve a rate break, and we'll stay disciplined here.

Switching now to 787. We are stable at 8 aircraft per month, while the factory is performing well. While we have stability in our factory, delivery cadence has been uneven month-to-month due to the seat certification challenges we've discussed previously. We are seeing increased stability in our supply chain and closely watching engine delivery performance as it remains the pacing item for rate 10. We still expect to start the transition to 10 per month yet this year, and we're making good progress on our Charleston expansion to support even higher production rates.

Beyond the progress we're making in our factories, we're also continuing to position Boeing for the long term. That is showing up in the quality of our backlog, the demand we're seeing across the portfolio and in the investments in program wins that position us well into the future.

Last month, we achieved a transformational win that will shape the company for decades to come when the U.S. Navy selected Boeing as the winner of the FAXX competition. To be selected for another sixth-generation fighter program is a testament to our innovation, our team and trust we've built with our customers. It is a true honor to support the national security priorities and a responsibility we take very seriously.

In addition to FXX, we continue to see strong demand for proven franchises across our defense and space portfolio. Boeing received a 7-year contract to accelerate and eventually triple the PAC-3 seeker production, supported by our early investments in facilities, workforce and supply chain. In the quarter, we also received a contract to manufacture 22 more F-15EX aircraft for the U.S. Air Force. And this award brings the total number of aircraft under contract to 120 with the potential for additional upside as the F-15EX continues to demonstrate the value of its unmatched payload and range capability.

Beyond new franchise wins, we also continue to see tangible benefits from the active management approach that we've talked about. As I said last quarter, Starliner was a program where we still had work to do with the customer. We've since worked with NASA on a path forward to support future flights while reducing our program risk, including $359 million of additional NASA funding. Taken together, these are the kinds of actions and outcomes that will support our customers, strengthen Boeing and position us well for the future.

That long-term position is also beginning to give us greater visibility into the financial path forward. As I mentioned, over the last 2 years, we've made exceptional progress restoring trust, retiring risk and transforming our culture and rebuilding the foundation of safety and quality that will help ensure durable success. We have also been deliberate about not getting ahead of ourselves given the range of outcomes tied to the production ramp, certification timing and other critical program execution. But we appreciate that it's been difficult for shareowners to assess how our progress will translate into financial performance.

We're now at a point where the range of outcomes is narrowing. As we look ahead, our outlook is supported by a record backlog of $745 billion with improved pricing dynamics, a more stable production system and better underwriting on development programs and our plans for continued progress on aircraft certification. Taken together, those factors give us confidence to share a multiyear free cash flow target for the business.

We've narrowed our range and expect to generate approximately $2 billion of free cash flow in 2026. I'm expecting that, that will improve to about $3 billion in 2027, inclusive of the additional CapEx to support the FAXX development. We believe this should improve to about $6 billion in 2028, as we start to burn off some of the headwinds and accelerate from there. And I expect to achieve the $10 billion target in 2029. Jay will provide further color on the elements driving this trajectory in his remarks, but it's important to highlight, we continue to see significant growth potential beyond the $10 billion, in line with our prior comments.

So to sum it up, we remain well positioned for the long term. I'm pleased with our progress we've made so far. We've come a long way, but we're entering a new phase and the bar is higher now, as it should be. Our job is to keep raising our performance to meet higher expectations while always prioritizing safety, quality and stability. I'm confident we'll get there because we're doing the right work and taking the right actions to build more durable, dependable performance over time.

So before I close, I want to thank all of our employees for the work they're doing every day to move Boeing forward. And with that, I'll turn it over to Jay to discuss our financial results in more detail before we move to question and answer.

Jesus Malave

Thanks, Kelly, and good morning, everyone. Starting with consolidated financial results for the quarter. Revenue of $24.2 billion was up 4%, primarily driven by higher defense and services volume, partially offset by less favorable commercial delivery mix in the quarter. Operating margin improved to 1.5% and core earnings per share improved to a loss of $0.34, reflecting higher segment earnings and lower corporate expenses.

Free cash flow was positive $464 million in the quarter, an improvement versus the prior year, driven by improved working capital, partially offset by the Department of Justice settlement payments of approximately $700 million and planned CapEx for our investments to expand capacity in Charleston and St. Louis.

Turning to BCA on the next page. BCA delivered 161 airplanes in the quarter. Revenue was $10.7 billion, down 3% year-over-year, driven primarily by less favorable delivery mix. Operating margin of negative 6.5% improved materially versus the prior year's results which were impacted by the 777X charge. That improvement was partially offset by a reduction in booking rates associated with production rate adjustments and higher estimated supply chain costs.

Backlog at BCA increased again to a new record level of $612 billion. It includes over 6,300 airplanes. This includes orders during the quarter from Turkish Airlines, Ethiopian Airlines and Lufthansa.

Clicking down on commercial program performance. Starting with the 737, we delivered 124 airplanes in the quarter. As we close out the year, the delay and stability at 47 per month is expected to translate to the lower delivery output and come in shy of the 500 delivery target. Let me remind you that we've built -7 and -10 aircraft prior to certification that will start delivering early next year.

Going forward, we expect longer intervals between rate steps, the higher we go, which is more in line with our historical demonstrated performance. That said, our team has detailed plans for what is required to get to higher rates, and we continue to make investments to create more capacity and resiliency in our production system that will enable stronger performance at higher levels with a consistent focus on safety and quality.

On the 787, we delivered 22 airplanes in the quarter. We continue to expect to deliver 90 to 100 airplanes in the year, but expect it to be closer to the lower end, given the delays in getting to rate 10. In Charleston, our factory expansion is underway, and we expect the majority of the capability to come online late next year.

In addition to the two lines in our current footprint, our second final assembly building will add a third line that increases capacity, flexibility and resiliency in our production system. On the current 777 metal-wing freighter, we received FAA approval for incremental production of up to 35 units, further extending the most popular dedicated freighter of all time.

During the quarter, our 777 freighter and 767 tanker production lines were disrupted by a supplier of wing components. Shipments from that supplier have resumed. However, there will be a gap in our production system that gradually flows through these production lines over the next few quarters. The cost of that disruption was not material in the third quarter, but will be treated as abnormal costs and period expense over the next few quarters.

Finally, on 777X, as Kelly mentioned, we remain on track for first delivery in 2027. As we get closer to certification, we have firmed up our production and delivery plan. We are currently producing airplanes at a rate of approximately one per month, and expect to stay at that level for most of 2027. These latest assumptions are within our EAC.

With respect to program cash flow, we continue to expect 2027 to be a significant use of cash with 2028 improving before turning positive in 2029. Like the rest of our programs, we are prioritizing safety, quality and stability as we ramp this new production system and work towards a delivery schedule that our customers can reliably plan for.

Okay, let's shift over to BDS on the next page. BDS delivered 30 aircraft and 3 satellites in the quarter. Revenue increased 15% to $7.9 billion, driven primarily by higher volume, including growth on classified programs and missiles and weapons. Spirit contributed approximately $160 million of sales in the quarter or 2 points of growth.

BDS operating margin was 6.2% in the quarter and includes a $252 million gain on the sale of HRL laboratories. Across the BDS portfolio, we continue to see operating performance gains in line with our expectations of steady margin improvement, and we remain confident in our path to high single-digit operating margins by the end of the decade.

BDS booked $23 billion in orders during the quarter with record backlog of $101 billion, and we remain committed to our strategy of entering into appropriate contract structures on new business. Importantly, in the quarter, BDS was selected by the U.S. Navy to design, build and deliver the FAXX next-generation fighter aircraft. This order was not included in our third quarter backlog pending completion of the source selection and evaluation process.

Now moving to Global Services on the next page. BGS sustained its momentum and delivered another quarter of strong financial performance. Revenue was up 4% to $5.6 billion. Excluding the impact of the digital aviation Solutions divestiture, revenue was up 11% from prior year, primarily driven by government and commercial modifications volume. Operating margin of 18.3% was up from prior year. Unfavorable volume and mix, partially offset by the divestiture last year.

Both commercial and government businesses delivered double-digit margins in the quarter. Operationally, the BGS team continues to demonstrate process improvements across the business. For example, on the C-17 heavy maintenance program, we continue to perform work at record low rework levels while taking on greater scope of work for our customer, supporting revenue growth and margin performance. BGS received $5 billion of orders and ended the quarter with a backlog of $33 billion.

Shifting over to cash and debt. Cash and marketable securities ended at $20.7 billion, primarily reflecting cash flow generated in the quarter. But that balance was unchanged from the prior quarter at $45.9 billion. We continue to maintain access to $10 billion of revolving credit facilities, all of which remain undrawn, and we remain committed to strengthening the balance sheet and supporting our investment-grade rating.

Now let me provide some additional context on our free cash flow outlook and targets. First, as Kelly noted, we have narrowed our prior range and expect to deliver approximately $2 billion of free cash flow in 2026. This includes the assumption of the KC-46A Tanker Lot 13 order in advance as well as other seasonal working capital benefits in the quarter.

As Kelly said, we have increased clarity into our medium-term financial plan. In 2027, we expect to generate approximately $3 billion of free cash flow, followed by approximately $6 billion in 2028 and $10 billion in 2029 with significant growth potential beyond that in future years. For financial planning purposes, these targets assume that 777X will be certified by midyear 2027.

For 2027, in addition to the absence of the DOJ payment made in 2026, we expect free cash flow growth to be driven by higher commercial deliveries, modestly improved cash margins on the 737 and 787 programs, continued improvement at BDS and continued steady growth at BGS. We expect these fundamental growth drivers to be partially offset by the impact of less favorable working capital, including lower year-over-year BCA order deposits and around $1 billion of increased CapEx, which includes the growth associated with recent awards in BDS.

Keep in mind, as we discussed earlier this year, 2027 free cash flow will be significantly impacted by the legacy cash drags. Beyond 2027, we expect these legacy cash drags to continue to abate in a path to $10 billion to be underpinned by higher 737 and 787 deliveries with improving cash margins. Positive cash contribution from 777X, profitable growth at BDS and BGS and still elevated but lower CapEx. As we have said before, there remains significant growth beyond the $10 billion in the future. All of this is underwritten by the robustness in pricing included in our record backlog of $745 billion. As we advance, we would expect to provide additional assumptions in support of this free cash flow plan and other elements of the P&L.

Okay, summing it up. Our focus remains on deliberate and disciplined execution, consisting of steady deliveries, validated rate step-ups in operational performance that builds upon itself. We will not sacrifice long-term durability. Every decision is made to enable us to deliver on the full potential of the business.

With that, let's open up the line for questions.

Operator

[Operator Instructions] Our first question comes from the line of Myles Walton from Wolfe Research.

分析師問答

Myles Walton

You went through a lot there on the walk from '26 to '27 free cash flow, a lot of positives. But yet, it's only ex the DOJ payment, a few hundred million dollars of growth. Could you size the advances as being abnormal in '27? And then maybe walk us a little bit more on the $3 billion expansion in '28. Is that 3/4 from 777X, maybe just the combination of -- in '29?

Robert Ortberg

Okay. Sure. Thanks, Myles. Let me maybe slow it down a little bit. I could was moving pretty quick there through the materials. And just go back and just another quick summary here. As you mentioned, Myles, the DOJ payment doesn't repeat in 2027. That's a $700 million benefit. As I also said during my prepared remarks, we'll get the benefit from higher BCA delivery volume as well as modestly improving cash margins. You may recall in the second quarter, I discussed BCA margins, and they were about -- for 2026 around breakeven. So our contribution from BCA will be largely from the improving cash margins in 2027.

Of course, we'll have continued growth from improvement from BDS and BGS. So those all taken together provide positive benefit to cash flow in 2027. As you mentioned and as I mentioned in my prepared remarks, we will expect to have lower customer deposits by BCA -- 2026 was just a very strong year. It's trending to be a record year. The market is strong. Our campaign activity and pipelines remains robust. So we still expect 2027 order cash to be pretty strong as well, but just not at the same record level of 2027. And yes, I would kind of size that in the range of a few billion dollars of impact.

And then as I mentioned, just to close it out, the CapEx will be higher at $5 billion. So it's about $1 billion higher than 2024. So those are all the building blocks of 2027 free cash flow. As we get into '28 and really '29, it's kind of a similar story. These legacy drugs continue to abate, and they come down. And so we'll see improving cash margins and we'll also get the benefit -- a higher benefit from higher delivery volumes because now we'll be working from positive cash margins. And so we'll get a double benefit from both of those, and that's all supported by the backlog that we have.

As we get to 2029 more specifically, will be at higher production levels. And so I've said in the past that we expect that the building blocks have a $10 billion free cash flow on a normalized basis is around 52 on 737 for deliveries -- on a delivery rate around 10 for the 787 -- on a delivery rate and positive cash generation out of 777 program.

In '29 specifically, we'll be operating at higher production levels, which will translate into higher delivery levels. And so we'll be closer to the mid- to high 50s on deliveries in '29. We'll be closer to around 12 per month on a 787, and we'll be generating positive free cash flow or expect to generate positive free cash flow on the 777X in '29. The reason we need to be at higher levels because we'll still have some residual drags in '29. And I expect those to be fully behind us for the most part by '29. So there's runway, as I mentioned in my prepared remarks, in 2030 and beyond above $10 billion. So hopefully, that encapsulates '27 and also the future year outlook for you.

Operator

Your next question comes from the line of Seth Seifman from JPMorgan.

Seth Seifman

Wanted to ask a little bit about the unit returns on aircraft. You talked in the release about some cost growth that we're seeing. If you could -- both from the supply chain and from the process of increasing rates. If you could give a little more color on what that is. And then also how it affects your thinking about unit cash profitability in the out years?

And then on the pricing side, the fact that we're looking at kind of more gradual ramp-up in rates. Is that affecting the ability to kind of -- the timing on moving beyond some of these legacy drags on unit revenue?

Robert Ortberg

Seth, let me kind of walk you through -- let me start with the BCA margins here in the third quarter. We did -- I did talk about them being impacted by the rate adjustments as well as higher supply chain costs. We had to rollout, as you know, through our EACs, which resulted in an impact to our booking rates. Specifically on -- I also had to talk related to the 777 program, the existing freighter program in the 767 program, we expect some abnormal costs to carry forward now in the fourth quarter into the first half of the year. I expect those to put some pressure on call it, third quarter run rate margins over that period of time, but they will abate and pretty much diminish in the second half of the year.

When you take into account the benefit of cost-based extensions and higher price backlog and other performance with the higher volumes, we will make some significant improvement in the back half of the year, put ourselves in a position to get to about breakeven in early 2028. As it relates to cash, all of this that we talked about in these impacts here in the third quarter, all contemplated and factored into our cash flow projections as well as the ramp in the cash margins over this period of time. And so I don't really see much of a difference there. We've absorbed it. We've contemplated that. And with the price that's already in the backlog, I'm highly confident in the improving margin profile of the BCA programs, both the 737 and 787.

Operator

Your next question comes from the line of Sheila Kahyaoglu from Jefferies.

Sheila Kahyaoglu

Thank you so much for all that long-term color, Kelly. But maybe if we could just step back and talk about the macro, lots of interest around how higher for longer oil prices might affect the aerospace industry. And obviously, you have a key unique perspective on that. Can you maybe talk to customer channels you're checking to assess the market, whether it's orders, the services business or just how you're seeing lease rates move around just given the capacity cuts. And with your long-term guidance of free cash flow, what sort of oil price does that assume?

Robert Ortberg

Yes, Sheila. So we are -- to confirm we are in constant contact with all of our customers here as we're navigating through these high fuel prices. I think the actual impact is going to be different depending on the airline. Obviously, a large portion of our backlog is going into replacement aircraft. So for those customers who are bringing on new aircraft to replace older aircraft, these are much more fuel efficient. And in fact, the high fuel prices are driving them to really, really want these aircraft sooner. So the area that we may see softness is in the overall growth, depending on what the airline overall growth would be.

So far, we haven't seen, Sheila, we haven't seen anybody wanting to replan their order growth. If that should happen, quite frankly, given our oversold backlog, I think there's opportunity for us to shift around and manage through that. But obviously, it's something we have to keep an eye on. So far, the airlines have been, for the most part, flowing the higher fuel into ticket prices, think over the next coming quarters, we'll have to watch that. But again, at a macro level, I feel pretty good about our ability to manage even if we do see some softening demand on the growth market because there's plenty of customers who are looking for airplanes faster for replacement. So we may have to rewicker a little bit of our firing order. If that happens, it's not happening yet, we have to keep close to our customers here.

Operator

Your next question comes from the line of David Strauss from Wells Fargo.

David Strauss

Jay, the walk to '27, can you maybe just put a finer point on what you're expecting for MAX and 787 deliveries, including what you're assuming for liquidation of the 7 and 10 inventory? And then 777X, I think that's obviously pretty big. The timing there is a pretty big risk item to the outlook. Let's say that slips out of '27 into '28, how much of a risk could that be to that $3 billion cash guide?

Jesus Malave

Okay. Just on your -- on the inventory aircraft, next year, we expect between -7 and -10 deliver around 30 aircraft that are prebuilt going into the year.

On the '27 cash bridge -- what was the...

Robert Ortberg

It was on the 777. He was asking about the 777, if it would slip out.

Jesus Malave

Okay, the 777X program, look, it's a scenario that would be significant. We're on a good path, though, as Kelly mentioned in his prepared remarks, I think the risk would be more of later in the year, which would have a kind of some impact on deliveries. Think about deliveries next year between 10 to 15 in that ballpark. And so maybe you'd see some deliveries come down a little bit. And so I think that, that could be absorbed within the guide that this $3 billion.

David Strauss

Yes. And I was also hoping to get just the -- what you're exactly assuming for MAX deliveries and 787 deliveries in total...

Jesus Malave

Yes, that's the question I forgot. Please if it, David. So that -- we'll give a little more color in January. What I can tell you is think about total deliveries at BCA to be up 10% plus, similar to this year. And we'll give more color on that more specifically by program in January.

Operator

Our next question comes from the line of Scott Mikus from Melius Research.

Scott Mikus

Jay, I think you mentioned in the out year 2029 time frame, you're expecting 737 production in the mid- to high 50s and 12 per month on the 787. You're going to be at 52 per month in the back half of next year on the 37 moving to 10 per month on the 787 by the end of this year. I'm just curious why it will take roughly 2 years to move up to those higher rates contemplated in the '29 targets? Just has the outlook for the supply chain deteriorated at all?

Jesus Malave

No, good question. It's a very good question. And typically, what we have is deliveries do lag the production. But what I would characterize the reconciliation of that is really the upside opportunity that we have in 2029. If we're able to deliver at these higher rates that we're producing it and that would provide upside to the $10 billion target that we have out there.

Scott Mikus

Okay. Got it. And then if I could just follow up real quick. Any assumption on cash taxes or cash interest by the time you get to '29?

Jesus Malave

It's more of the same. We won't start to have taxes kick in into the early 2030s. I just will come down a little bit accordingly with the maturities, but not significant interest cash.

Operator

Our next question comes from the line of Doug Harned from Bernstein.

Douglas Harned

Kelly, if I go back to August on the 737, we looked -- we talked in and things looked pretty stable. It seemed at 47 a month, although as you highlighted, the there were wings, Wichita -- all those things to think about. -- engines, I think, seem fine. But in September, you described the challenges on drilling holes on the wing, but as we look at getting the stability now, what has to happen is the wing issue resolved at this point? Where does Wichita stand? And how do we get comfortable that if the visibility wasn't that good back earlier in the summer, how do we get comfortable that things are moving on to the right track to get to that 52-point next year?

Robert Ortberg

Yes. Okay. So let me, first of all, say that engines aren't a problem in this equation. So you can kind of take that out of the equation. We had a series of flow enablers to allow us to ramp up production from 42 to 47 to support that in our wings back office or back shop. That's where we build all the wings for the 737 aircraft. And some of those flow neighbors just flat out did not yield the flow savings.

Some did, some didn't. So we had to step back and make some changes to that. We've got some additional flow enablers. In some cases, we're adding some capacity where we didn't see the flow enablers yield, and we're going through that process right now. Now Early signs are encouraging. We are improving, but we're not yet to where I can say we're stably producing wings to support the 47 a month rate. So we're going to want to dwell on that for a little while to make sure we're stable and don't end up in an unstable situation with production.

Now that informs our next rate increase, obviously. So we didn't go smoothly from 42 to 47 as we did from 38 to 42. And so we're going to want to make sure in the next rate break, at 52 that we very much have understood and tested all of our rate enabling functions in the back shops to make sure that they're going to yield.

The other thing is recognize that for rate 52, we've got to have Everett the Everett line up and running as well. Really no change to our outlook there. That's going well. In fact, yesterday, we rolled out our first -10 from the Everett production facility. So look, we've got to get wings stable, and that's been a challenge for us. And it's just as a result of the process improvement yields weren't there. And so we're going to lose learn from that and make sure before we go to the next rate, we've fully tested these improvement areas and make sure that they are going to yield the next rate increase.

Douglas Harned

But if I can, are there any other watch items here? In other words, if you get the wings really, is that done -- once that's done, things like -- coming out of which other supply chain questions. Are there any other significant watch items? Or will you feel pretty good on this once you've cleared the wing situation?

Robert Ortberg

Well, I think right now, wings are what have caused us the instability. Part of that is because we do have inventory in fuselages. But once we get through wings, fuselage will be an important a focus area for us as well. And backing up on that, remember that we are producing fuselages at a lower rate than the final assembly intentionally to burn down inventory. So the balance of this year and early into next year, we do have to see the ramp-up of fuselages also, and we get synchronized with the final assembly at rate 52. So that's all in the calculus of our go-forward plan here, getting Wings stable, ramping up the fuselage.

I wouldn't point you to anything else in the supply chain right now. I mean, there's always the pop-up kind of things like we've had with the GKN windows that we're working to alleviate. But there's no systemic challenge I see right now. Again, I think it's wings, fuselage will be important for this next rate break.

Operator

Your next question comes from the line of Peter Arment from Baird.

Peter Arment

Kelly, you just kind of touched upon which to a little bit, but maybe if you could just give us an update of the ongoing ramp of what you're seeing in Spirit. Any metrics you want to share on that progress? And then Jay, just to kind of confirming BCA cycling at much higher levels. It sounds like you're calling out a potential breakeven margin in play for '27. Are you expecting BCA margins to return to more historical levels with your kind of '29 outlook? Just maybe any color there on the slope of the margin recovery at BCA, that would be helpful.

Robert Ortberg

Okay. Let me start with Wichita. So overall, the integration is going according to our integration plan. One of the things that we really are focused on, while we kept Wichita at a lower rate, was to implement our safety and quality plan at Wichita that we were very successful in implementing in Renton, as you know. And so we've been doing that. I would say that that's probably slowed them down a little bit as we've implemented some of these safety and quality features. So you'll see our inventory of fuselage is probably a little bit lower or burning down a little bit faster than what our baseline plan said. But again, we've got the ramp-up plans in place that's contemplated in our forecast here as we go forward. And also contributing to making sure we stay stable at 47 a little bit longer before we move to 52.

Jesus Malave

On the margin recovery, Peter, we often anchor and compare to 2018 margins. What I could say there is on the 737, it will ramp up the margin profile, but we'll not reach what it was in 2018 either on a percentage or absolute basis. By contrast, the 787 by 2029 will exceed what it was on 2018, both on an absolute basis as well as on a percentage basis. Taken together, overall, will be in that benefit in '29.

Operator

Your next question comes from the line of Noah Poponak from Goldman Sachs.

Noah Poponak

Jay, it seems like a decent amount of the variance in the free cash trajectory you just provided versus maybe what some people are thinking is CapEx. So you gave us a '27 CapEx. Maybe you could just give us the capital plan for '28, '29 or when you get back to normalize as a percentage of revenue? And then on 777, I guess, it's fairly surprising to hear the answer to the prior question that you could absorb another slide. Just last time it had the slide, everybody had to move free cash around a lot. So should we interpret that as you are providing conservative numbers you want to be able to beat? Or is it just that the 777 delivery plan is so late in '27 that it can slide?

Robert Ortberg

Yes. Let me address 777, and I'll let you talk about the cash flow. When we did the reset last -- the last reset major reset on the 777 program, we definitely put management reserve in there to allow for additional schedule pressure going forward. Now I don't want to imply that the 777 program has moved to the middle of next year. We are still driving to the team for certification. But what we're saying is we've financially provisioned such that if certification delays to the middle of the year that we'll still be able to do that within our EAC. We're driving to a much earlier date right now. We don't yet, as I said in my prepared remarks, we don't yet have the full authorization for the flight test program. There's a couple of things I will note is the FAA had a tremendous amount of work to do on the -7 and -10 certification as did our test teams. And having that work behind us really does allow us to both parties to put more resources on the 777 test work that's yet ahead of us. So I'm hopeful to see us accelerate that here as we run through the balance of the year and run into next year.

Airplanes are flying. We're making progress on the test program. We are getting some incremental authorization for additional flight testing from the FAA that think of it as kind of an extension to the TIA 4B. We still have these big flight tests yet ahead of us -- flight test authorizations yet ahead of us. So we're working hard to get all that done. I will also say that I think we now know after the -7 and -10 what it takes to get certification complete in this new post world of regulation. And so that's factored into our planning and we're off executing that with the FAA now.

Jesus Malave

On your question, Noah, on CapEx, for '27, about $5 billion, as I mentioned, '28 and '29 would be around $4 billion in each year. And just going back -- circling back on the 777X on the cash. Again, it was in the context of really the way Kelly just laid it out. We're talking an impact of a few months, a month or two is what I was quantifying.

Noah Poponak

Okay. And Jay, going to $4 billion is still 3% of revenue that company was running two or even a little below two for a while. Is it structurally higher? Does that -- you just have a lot of new projects and that does eventually work back down as a percentage of revenue?

Jesus Malave

Yes, I would expect it to be higher than 2%. It will come down, I think, over time, but it will be kind of 3 plus -- 3% to 4% is the right way to look at it on a normalized basis out in the future.

Operator

Our next question comes from the line of John Godyn from Citi.

John Godyn

Kelly and Jay, obviously, a lot of new detail about the free cash flow over the next few years. If we took it at face value, it kind of seems like all the numbers are just sort of parallel shifting lower. And what I want to ask about is just make sure we haven't lost sight of the North Star beyond 2029. Obviously, you don't have specific numbers out there. But if we thought about our model should be changing in 2031 -- or 2030 and 2031 or whenever you kind of view getting past this period of ramp, has that ultimate number that kind of more full earnings power changed in your mind? Has that North Star shifted at all? And any other color on that, that you're willing to give would be helpful.

Jesus Malave

No, I don't believe so. But I think both Kelly's and I comments both said the same thing, which was we expect significant growth beyond 2029. And so we will see runway continued runway on the margin improvement, and that will be a continued source of increasing cash flow in addition to volumes.

Back on the prior question where we're talking about what we're assuming for 2029 from a delivery perspective, that also provides runway to deliver out of rate 63 and at a rate 14 on 787. So that will be a compounding benefit going beyond 2029.

John Godyn

So is it fair to describe what's happening here is a steepening of the overall free cash flow profile but getting to the same point?

Robert Ortberg

John, I kind of look at it as almost like a -- from expectations, more of a 1-year shift to the right. I don't think our expectations about the slope or the or the absolute endpoint has changed at all.

Operator

Your next question comes from the line of Ron Epstein from Bank of America.

Ronald Epstein

Kelly, Jay, I promise I will not ask a cash flow question, but let's talk about You guys won 47, you won FAXX. It would appear that the future of tactical aircraft, military aviation for the U.S. is in Boeing's hands. So Kelly, how are you thinking about that for BDS? We think more broadly about BDS. How could BDS grow? What's that mean for margin -- I mean that's a real structural change, right? I mean just a couple of years ago, I don't think anybody thought that was in the cards here -- so how do you think about it?

Robert Ortberg

Yes. So well, first of all, we are going to see higher growth out of our defense portfolio than maybe what we thought a year ago. I think we were thinking more in terms of low single-digit revenue growth. Clearly, that's going to be more towards the high -- middle single digit or higher going forward. .

The important part is all these programs are also being underwritten with the right contract type. So not only are we booking more orders, we're working more orders that won't result in some of the challenges we've had. And it's not just the order booking, Ron. We've moved MQ-25. We've moved T7 2 milestones see on both of those, a big new order on F-15Ex and there's more to come on that, the PAC-3 seeker growth. And we've done MOUs with all of our customers on these big fixed price development contracts, and we've got Starliner kind of under control here in the last quarter.

So look, I feel much, much better about both the growth profile but also the margin performance profile. We still have to get through. We're not done with the development programs until we're done. But Steve Parker and his team are doing a really, really good job of finding win-win scenarios with our customers to get these projects move forward. So the outlook is strong. Our products across the board are in strong demand, and the budget supports additional growth. So look, I think our defense portfolio is a little bit of a sleeper here.

Ronald Epstein

Just as a follow-on, just to kind of reiterate a question, we've got a lot, and this is for either of you guys. -- on that access, RF 47, if you can say, people ask, is it fixed price development? Can you hit? Is it not -- I'm hoping it's not. Can you give us a hint there?

Robert Ortberg

So the F-47 is cost plus and the FAXX, I can't say, but I'd just say it's an appropriate contract type.

Operator

Your next question comes from the line of Gavin Parsons from UBS.

Gavin Parsons

I was hoping to get your latest thoughts on the possibility of a new single-aisle aircraft. And then separately, whether or not there's any assumption for higher R&D and CapEx related to that in the '29 free cash guide?

Robert Ortberg

So really, nothing has changed on our outlook on a new airplane. We've got a team working in our product development right now, trying to define what that what looks -- that looks like and what the market timing is. So really no change in our outlook. And certainly, that's -- any investment we need for that is contemplated in our cash outlook here.

Jesus Malave

Yes, that's right. And there's not significant types of investments here. More of our investments would be in kind of R&D tech development type

Robert Ortberg

And we will be ramping down as we finish the -- well, we're ramping down right now as we finish the 737 program. When we finish the 777 program, you will see a shift of resources and spending from those development programs to new programs.

Operator

Your next question comes from the line of Gautam Khanna from TD Cowen.

Gautam Khanna

I was wondering if you could elaborate on the shape of deferred production across the three programs. If you can give us some sense for how much those balances will grow in aggregate next year? And then when they will decline and by how much in '28 and '29 in your assumptions?

Jesus Malave

Yes. Gautam, I'm going to get into the specific changes, but what I'll tell you is in the 737 and 787, essentially start to flat out next year. So they're lower use of cash. Going into '28 and '29, they become sources of cash and they've become pretty significant sources of cash and drive working capital in total to continue to be a source of cash. And so those are, I think, directionally where they're going. The 777X program because it's going to be early on in deliveries, that will grow and that will grow over the next few years. But again, the cash drivers will be because of improved profitability on the 737 and 787 programs, we'll see a nice benefit from deferred production reductions on those two.

Eric Hill

Operator, we have time for one more analyst question.

Operator

Certainly. Your final question comes from the line of Robert Stallard from Vertical Research Partners.

Robert Stallard

Kelly, maybe just to round things off here. I was wondering if you could comment on what has allowed you to give this free cash flow guidance here. What has changed in terms of your outlook that gives you the confidence to give these numbers?

Robert Ortberg

Yes, Rob. Look, it's been a couple of years of really taking challenges faced on in getting those challenges put to bed. We have significantly reduced the risk of this portfolio. If you look at just 2 years back, every one of our fixed-price development programs was challenged. We've got that at hand. We didn't know whether we'd won any of the next-generation six-gen fighters. We've won both of those. So we've got that well at hand. And we can see the improved performance in how we're underwriting our defense business.

We also were -- if you recall, 2 years ago, we were coming out of a strike, and we were producing at 0 in our commercial factories. We've successfully ramped up to 38, albeit the ramp to 47 has probably taken longer than anybody wants. Everybody wants us to go faster. I get that. But we're going to stay disciplined as we ramp up here. And I think what we -- as we've looked at this, we feel like we have a better handle on the risk to where we can provide you an outlook that we can meet. And so I think now is the time the borrower, as we said in the previous -- in our prepared remarks, the expectations are rising. We recognize that, and I think that's good and the expectations on ourselves are rising. And -- so we're providing this with confidence that the team is ready to go execute. There's still things out there that we got to deal with, but not near the uncertainty we had before, so I feel like it's a good time to do it.

Operator

And that completes The Boeing Company's Third Quarter 2026 Earnings Conference Call. Thank you for joining.