Boeing reported third-quarter earnings and revenue that topped analyst estimates, but the company hinted at a possible lower production rate for its wide-body 777 jet.
Revenue climbed 9 percent to $25.8 billion, topping analysts' consensus estimate of $24.7 billion, according to the financial research company, Factset. Boeing's net earnings jumped 25 percent. The company delivered a record 199 airplanes in the quarter.
But one question investors and analysts have been wondering about is whether the company can sell enough 777s to keep up its production rate as Boeing transitions to the next model, the 777X.
Chief Executive Dennis Muilenburg hinted that Boeing may lower the rate at which it builds the 777 below its current pace of 8.3 jets a month.
"We don’t see any scenarios where we’d come down below a seven-a-month production rate during the transition," Muilenburg said on a conference call with analysts and reporters.
Muilenburg says the market for cargo airplanes is still soft and some customers are hesitating to make purchases because the Export-Import Bank hasn’t been reauthorized. That’s the federal agency that helps foreign customers with financing.
The reason why a production rate change for the 777 is a big deal is because the airplane generates a lot of profit for Boeing.
