By Michelle Dunlop Herald Writer
The Boeing Co. expects to take a $150 million charge from its first quarter earnings as a result of the recently enacted federal health care plan.
Boeing said Wednesday that the expense will hurt earnings by about 20 cents per share during the quarter.
The company’s announcement comes shortly after the enactment of the Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act.
Beginning in 2013, Boeing said it will no longer be able to claim an income tax deduction related to prescription drug benefits provided to retirees. Although this tax increase does not take effect for three years, accounting standards require that it be written down in the period in which the legislation changing the tax law is enacted.
Several other companies have said they will take accounting charges due to the health care reform bill, including AT&T, AK Steel Corp., Caterpillar Inc. and 3M Co.
Boeing will revise its earnings estimate and announce the change when it reports first quarter earnings next month.
The company’s shares dropped 93 cents Wednesday to close at $72.60.
The Associated Press contributed to this report.
Big Boeing order
Australia’s Virgin Blue signed a firm order for 50 Boeing Co. 737 jets, the carrier announced Wednesday.
Virgin Blue also will have options for 25 more 737s with firm delivery positions. And the airline has an additional 30 future purchase rights.
This is the biggest order in Virgin Blue’s 10-year history and Boeing’s largest order in 18 months.