01:40 PM EST, 01/29/2025 (MT Newswires) -- Boeing ( BA ) has a healthy level of inventory and is optimistic heading into 2025 after resuming commercial aircraft production in December following a machinists' strike.

The aircraft maker, which finalized a labor deal with workers early in November, delivered 18 of its 737s in December and 33 so far this month. Executives on the company's earnings call this week said they expect 38 737 deliveries per month later this year.

"Remember that we've got a significant amount of inventory, both in airplanes and in supply parts," Chief Executive Robert Ortberg said on the call, according to a FactSet transcript. "So, I don't see any constraints right now from the supply chain for us in ramping up the 737 to the 38-airplanes-a-month rate."

The outlook for 2025 is much rosier than the company's performance in the fourth quarter.

Boeing ( BA ) reported a Q4 loss of $5.90 per share, widening from a loss of $0.47 a year earlier and worse than the consensus estimate from analysts surveyed by FactSet calling for a loss of $3.25. Fourth-quarter revenue was $15.24 billion, down from $22.02 billion in the year-earlier period and below the FactSet consensus estimate of $15.72 billion.

Ortberg left the door open for a further increase in 737 production, but Boeing ( BA ) must meet six key performance indicators, or KPIs, and receive Federal Aviation Administration approval to do so.

"We need to get to 38 airplanes and show stability at 38 airplanes with these KPIs, and we won't go to the FAA for a rate increase ... if we don't see these KPIs performing the way that we want to," he said.

The company's also targeting an increase in production of its 787 aircraft in 2025 to seven per month from five, and executives provided updates on how they are attempting to turnaround the defense and space business, or BDS, which booked an operational loss of $2.27 billion due to pretax charges of $1.7 billion on certain programs.

All of these plans demonstrated competent, confident leadership to investors, resulting in a bump in Boeing's ( BA ) stock price even after its dismal earnings report, said Richard Safran, managing director and senior analyst at Seaport Research Partners.

"What you've been seeing over the past two to three weeks is a return to the way investors (used to) perceive Boeing ( BA ), taking a two-to-three-year outlook," Safran said in an interview with MT Newswires.

Since joining the company in August, Ortberg has lent his industry credibility to Boeing ( BA ) and demonstrated sound leadership, and "they've been improving execution, so they have two quarters where they did what they said they were going to do and didn't have any slip-ups," Safran said.

Much of the pain in the BDS business has been caused by the 15% of the portfolio comprised of fixed-price development programs that were responsible for the $1.7 billion pretax charge. The fixed-price nature of these contracts means Boeing ( BA ) is on the hook when costs run higher than expected, which they have for both the KC-46A program and the T-7A program, executives said.

"There's some ongoing frustration with the number of charges that have continued to come about from some of these fixed-price contracts," said Jeff Windau, senior analyst at Edward Jones. Market participants are looking for insights as to how many more charges there could be and where the company is at in the process, he said.

"A handful of these contracts are causing a majority of the issues, and the challenge is not only with the development but also some of the production, and there's a little bit of a runway they have to go down to get beyond these issues," Windau said. "That's where these questions are coming in."

Despite the poor showing last quarter, Ortberg said Boeing ( BA ) is working with its customers to manage contracts that are beneficial for all sides. As part of that process, the aircraft maker has entered into a memorandum of agreement with the US Air Force on the T-7A program and is in active talks on a second MOA for the T-7A.

"Specific to the MOA, what we're doing is making changes," Ortberg said. "The Air Force wants some additional test aircraft, (and) that will allow us to eliminate concurrency. And by concurrency, what I mean is we're building production airplanes, while we're testing and certifying the design."

Concurrency has been a "disaster" because any changes that come out of that force the company to go back and implement those changes through the production process, even in airplanes that are complete, the CEO said.

"So the major milestone with the (first MOA) that we've got with the Air Force really helps us get more aircraft into the test program (and) eliminates concurrency risk for us going forward," Ortberg said. "While I said there's no silver bullet on these fixed-price programs, I do feel better about our ability to better manage the performance in 2025."

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