July 26 (Reuters) - Boeing said on Wednesday it was ramping up production of its bestselling 737 MAX narrow-body jet to 38 per month from 31, a sign the planemaker was recovering from a supplier error that had scuttled its plans for an early ramp up.
Shares of the company jumped 4% before the bell after the company also posted second-quarter results that beat Wall Street expectations.
Boeing reiterated its plan to generate $3 billion to $5 billion in free cash flow this year, as well as to deliver at least 400 single-aisle 737s and 70 787 Dreamliners in 2023.
The company still faces challenges, "whether they be issues to address within our own factories or outside our walls within the supply chain and logistics routes," CEO Dave Calhoun said, referring to the recent collapse of a railway bridge used to transport 737 fuselages.
The push to build 38 MAXs a month comes amid heightened travel demand, as airlines seek to grow their fleets post-pandemic.
Boeing Commercial Airplanes head Stan Deal said in June that the company would ramp up narrow-body production to 38 a month "very soon." Days later at Paris Air Show, Boeing booked a deal with Air India for 190 MAXs as part of a larger 470 aircraft order split between it and Airbus.
Although Boeing set a deadline to ramp 737 production by the end of the year, executives signaled to its supply chain that the boost to 38 a month would begin in June.
Those plans faltered in April when a supplier defect involving the improper installation of a 737 bracket was discovered, though Boeing maintained it would still ramp to 38 jets by year-end.
For the second quarter, Boeing reported a free cash flow of $2.58 billion, compared with a cash burn of $182 million a year ago.
The adjusted loss was 82 cents per share. Analysts polled by Refinitiv were expecting a loss of 88 cents per share.
Boeing's revenue for the quarter through June rose 18% to $19.75 billion, beating expectations of $18.45 billion.
Its defense business, however, was hit by a string of cost overruns.
The company took a $257 million charge related to Starliner after the space capsule's launch was indefinitely delayed in June, a $189 million charge related to the T-7 training jet due to an increase in supply chain costs, and a $68 million charge related to the MQ-25 tanker drone due to a schedule delay.
Reporting by Valerie Insinna; additional reporting by Abhijith Ganapavaram; Editing by Anil D'Silva
Source: Reuters