Boeing CEO says will not cut 777 output rate by more than 2 a month
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President, Chairman and CEO of The Boeing Company Dennis Muilenburg speaks at the "What's Next?" conference in Chicago, Illinois, U.S., October 4, 2016. REUTERS/Jim Young
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NEW YORK (Reuters) - Boeing Co (NYSE: BA) will not cut production of the 777 jetliner by more than two planes a month and is taking more time to decide on whether a cut is even needed, Chief Executive Dennis Muilenburg said on Wednesday.
Boeing already plans to cut production of the wide-body plane to seven a month next year from 8.3 currently, and many experts expect a further cut to five a month due to slow sales and transition to a successor jet, the 777X.
The world's biggest planemaker also is studying whether to lift production of 787 Dreamliners to a planned 14 a month from 12, Muilenburg said. The company signaled that it wants to wait until several sales campaigns are finished in 2016 and 2017.
"We expect to have additional clarity on 777 production decisions in the next couple of months," Muilenburg said on a call with analysts.
"On the 787 program we have more time to further assess the implementation of the next production rate increase that is currently scheduled to ramp up to 14 per month at the end of the decade."
Boeing's production rates are bellwethers of market conditions, closely watched by investors for signs of the plane maker's future earnings and cash flow. Sales and profits at Boeing's many suppliers also are affected by changes in Boeing's factory rates.
While noting "hesitation" among airlines for buying wide-body planes such as the 777 and 787, Muilenburg said sales of narrow-body 737s are relatively strong.
He also said that even if Boeing decides to cut wide-body production "we continue to expect commercial aircraft deliveries to grow beyond 900 airplanes per year through the end of this decade," providing reassurance that overall deliveries will continue to rise from the 745 to 750 expected this year.
Earlier on Wednesday, the company beat profit expectations in the third quarter.
(Reporting by Alwyn Scott; Editing by Chris Reese, Bernard Orr)
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