Boeing (BA) Reports Large Q3 Loss On Plane Setbacks
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In part due to the delay with the 787 and the overhaul of the 747-8, the Boeing Co. (NYSE: BA) saw its third quarter results decline, and the airplane manufacturer had to cut its year guidance accordingly.
The third quarter for Boeing saw a loss from continuing operation of $2.23, worse than the analyst estimate of a $2.12 loss. The company's revenue for the third quarter was $16.7 billion; while 9 percent higher than last year's strike affected quarter, fell short of the estimate of $17.18 billion.
The fiscal year 2009 EPS outlook for Boeing has been adjusted to $1.35 to $1.55, from $4.70 to $5.00, to reflect the 787 and 747 impacts. Wall Street was already at $1.54 for the year.
"The 787 cost reclassification and the 747 charge for increased costs and difficult market conditions clearly overshadowed what continues to be otherwise solid performance across our commercial production programs and defense business," said Boeing Chairman, President and Chief Executive Officer Jim McNerney.
Boeing reiterated its guidance to have the 787 in the air by the end of the year, with delays being caused by the company having to reinforce the plane, which will take away from the composite materials and light weight construction that the plane was sold on.
Alex Hamilton, an analyst from Jesup and Lamont, said he has a Hold on Boeing and that there are other options in the aerospace industry to invest.
Wells Fargo is maintaining a Market Perform on Boeing, citing cash flow uncertainties (787 penalties, insufficient orders, pension, aircraft financing). Analysts at Wells Fargo believe that the third quarter results are in-line with the company's prior announcements of the charges on the 787 and 747-8.
Goldman Sachs Analyst Noah Popanak sees Boeing as attractive citing that the market knew the losses were coming and that the pending release of new aircraft is a positive to watch.
In early market movement Boeing is trading down 0.89 percent.
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