Boeing hit a key milestone in its yearslong 737 Max crisis as a jump in deliveries helped it generate cash in the fourth quarter for the first time in nearly three years.

But it now faces mounting expenses in its 787 Dreamliner program, disclosing Wednesday $5.5 billion in costs tied to manufacturing flaws that have prevented Boeing from handing over those new jets to customers for most of the last 15 months.

The manufacturer took a $3.5 billion pretax charge for the fourth quarter on its 787 Dreamliners. It expects $2 billion in additional costs after it slashed production of the planes, double its previous estimate.

“While I don’t like any of the charges, the progress has been significant,” CEO Dave Calhoun told CNBC’s “Squawk on the Street” on Wednesday about the 787. He declined to say when he expects regulators to sign off and deliveries to resume. “We can’t rush it.”

Boeing reported free cash flow of $494 million for the fourth quarter, up from an outflow of $4.27 billion a year earlier, a milestone Boeing executives previously said they wouldn’t hit until 2022. It was driven by a surge in deliveries last year of the 737 Max after regulators lifted bans on the jets following fatal crashes in 2018 and 2019.

The company’s shares tumbled by nearly 3% in morning trading after releasing the results.

Here’s how Boeing performed compared with analysts’ estimates complied by Refinitiv:

  • Adjusted results: A loss of $7.69 a share vs. an expected loss of 42 cents a share.
  • Revenue: $14.79 billion vs. $16.59 billion, expected.

Boeing lost $4.29 billion last year, its third annual loss in a row as the Covid pandemic and production issues continued to hurt its bottom line. It’s an improvement from 2020 when the company had a loss of $11.94 billion.

For the fourth quarter, Boeing reported a net loss of $4.16 billion, less than half of the $8.44 billion it lost a year earlier. Sales fell 3% from a year ago to $14.79 billion, lower than the $16.59 billion analysts expected.

“2021 was a key rebuilding year for us, and together, we overcame significant hurdles,” Calhoun said in a note to employees Wednesday. “While we have more work to do, I am confident that we are well positioned to accelerate our progress in 2022 and beyond.”

Chicago-based Boeing’s aircraft sales and deliveries surged last year, but handovers of new planes to airlines still trailed European rival Airbus. The U.S. company said it has increased production of the 737 Max to 26 a month, closer to the 31 per month it has expected to produce this year and up from 19 a month it disclosed in its last quarterly report.

But Boeing has been hamstrung by the pause in deliveries of its 787 Dreamliners for much of the past year due to a series of manufacturing flaws, challenging customers like American Airlines and Hawaiian Airlines.

American Airlines last month said it would trim its international schedule because of 787 delivery delays. The carrier’s CFO, Derek Kerr, said on an earnings call last week that Boeing was already paying penalties for the delays and “will compensate us for the losses” if there are additional delays.

“The company continues to perform rework on 787 airplanes in inventory and is engaged in detailed discussions with the FAA regarding required actions to resume deliveries,” Boeing said in an earnings release. “In the fourth quarter, the company determined that these activities will take longer than previously expected, resulting in further delays in customer delivery dates and associated customer considerations.”

Still, Calhoun has said he expects that the worst is behind the aviation sector after the pandemic devastated demand for air travel and new planes. Airline executives earlier in January said they expect international travel bookings to rebound this spring and summer after travel restrictions were lifted in recent months.

Boeing and Airbus supplier General Electric on Tuesday forecast a 20% increase in revenue this year in its key aviation unit, which produces and repairs aircraft engines.

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