Boeing delivers most airplanes since late 2023 after ramping up 737 Max output

Boeing delivered 60 airplanes in June, its highest monthly total since December 2023, including 42 737 Max jets, signaling a potential operational rebound following the January 2024 door plug incident. The company also reported 150 deliveries for Q2, its best second quarter since 2018, and secured 70 net orders in June, bringing its backlog to 5,953. Investors will closely monitor CEO Kelly Ortberg's strategy to increase 737 Max production beyond the current FAA-imposed cap of 38 units per month, with a target of 42, during the upcoming Q2 earnings call on July 29.

Analysis

Boeing is demonstrating early signs of operational stabilization following its recent manufacturing crisis, with June deliveries reaching 60 aircraft, the highest monthly total since December 2023. This performance, which includes 42 of its bestselling 737 Max jets, contributed to a total of 150 deliveries for the second quarter, marking the company's strongest Q2 since 2018. This rebound is critical as the company has not posted an annual profit since that year. However, a significant operational ceiling remains in place, as the Federal Aviation Administration (FAA) has capped 737 Max production at approximately 38 units per month following the January 2024 door plug incident. While CEO Kelly Ortberg has expressed confidence in raising this to 42 jets per month, this move is entirely contingent on regulatory approval. On the demand side, fundamentals appear robust, evidenced by 70 net orders in June and a substantial backlog of 5,953 aircraft. The upcoming Q2 earnings report on July 29 will be a key event, with investors focused on management's strategy to navigate FAA oversight and deliver a credible plan for production and delivery acceleration.

Key Decisions for Investors

• View the improved June and Q2 delivery figures as a positive but preliminary signal of a turnaround; sustained month-over-month execution is required to confirm a durable recovery.
• The primary catalyst for Boeing's equity value is contingent on receiving FAA approval to increase 737 Max production beyond the 38-per-month limit, making any news from the regulator a key factor to monitor.
• Focus on the July 29 earnings call for specific guidance from management on the timeline for production increases and any revisions to the company's financial outlook.
• Consider that despite a strong order backlog, persistent production constraints risk further ceding market share to Airbus, a long-term competitive headwind that must be factored into valuation.