(Bloomberg) -- Boeing Co. Chief Executive Officer Kelly Ortberg said he’s optimistic the company can return to a closely watched production target for its all-important 737 airliner this year, a key milestone to turning a corner after reporting the second-worst annual loss in its history.
Barring any unforeseen setback, Ortberg hopes by midyear to boost output of its 737 aircraft beyond the 38-jet monthly pace capped by the Federal Aviation Administration a year ago as it delved into quality breakdowns.
“All those metrics are trending in the right direction for us to have a successful authorization to move beyond 38 a month,” Ortberg said in an interview Tuesday. “I would say that overall, I’m pretty pleased with where we are.”
The US planemaker’s dismal fourth-quarter results, much of which it announced late last week, underscore the urgency for Ortberg to pull Boeing out of a six-year nose dive. The company burned through a total of $14.3 billion of free cash during a calamitous year marked by near-catastrophe on an airborne 737 Max, leadership turmoil, federal investigations and a lengthy factory workers strike.
The adjusted loss per share was $5.90 for the quarter, worse than the $3.07 loss that analysts had expected, according to data compiled by Bloomberg. For the year, the company lost $20.38 per share, one of the worst showings in its history, and Boeing’s sixth straight annual deficit.
Boeing expects to burn through cash during the first quarter at a similar pace to the final three months of 2024. The outflows will eventually turn positive as the year progresses and its assembly lines speed up, Brian West, the company’s chief financial officer, said during an earnings conference call.
During the call, the planemaker’s executives mapped out a financial comeback in 2025, pointing to signs that it was already under way. The upbeat commentary buoyed Boeing’s shares, which rose as much as 7.6%, the biggest intraday gain since July 2023.
Past efforts to ramp up 737 production this decade have been hampered by late or defective parts from suppliers, as well as work done out of sequence on its assembly lines. This time, the measures are trending in the right direction, Ortberg said.
“Things look encouraging so far,” Ortberg said. While Boeing has much work to do in its factories, the CEO raised the possibility of reaching a pace of 42-jets-a month for the 737 before year-end, without putting exact dates on the ramp up plans.
Boeing has completed its review of assets that it plans to sell or jettison, Ortberg said, and the actions would play out over the next few months or year. In some instances Boeing will look to sell non-core businesses as part of a broader exercise that the CEO described as “pruning.” On projects where it is unable to find a buyer, the company might not bid on the next phase, he said.
The possible divestments include the Jeppesen navigation unit, which is attracting major aviation suppliers and private equity suitors and could fetch $6 billion to $8 billion for Boeing, people familiar with the talks have said.
The CEO faces a drawn-out recovery as he works to settle Boeing’s factories back into the steady operating tempo that was the norm before two 737 Max crashes in 2018 and early 2019 and the Covid pandemic hammered suppliers. But new challenges loom as Ortberg works to shore up Boeing’s quality controls and finances amid a leadership vacuum at the FAA and uncertainty over global trade under the Trump Administration.
The earnings included a larger-than-expected $1.7 billion accounting loss for the defense, space and security business. Company officials are looking to renegotiate contracts in some cases after completing deep dives into five fixed-price defense and space programs that have generated heavy losses, including the new Air Force One aircraft, Ortberg said.
While threats of tariffs have raised new risks of disruptions for Boeing, the largest US exporter, Ortberg said the company hadn’t seen any ripple effects to its business. That includes China, which last placed a major Boeing order in 2017 when President Donald Trump visited Beijing.
“First of all, we’re delivering aircraft as we speak to China,” Ortberg said in an interview. “So, that’s continuing to go quite well. And we certainly hope that there’s an opportunity for some additional orders in the next year with China.”
--With assistance from Anthony Palazzo.
(Updates with details of China prospects, cash generation, 737 production)
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