Boeing reports $1.6 billion loss

Published 11:15 pm Wednesday, October 21, 2009

EVERETT — The Boeing Co’s troubled 787 and 747-8 jet programs dragged down its third-quarter earnings, causing the company to report a $1.6 billion loss Wednesday.

“We look forward to getting the 787 and 747-8 in the air soon and moving forward with flight test and certification for these two important programs,” said Jim McNerney, Boeing’s chief executive.

Last month, Boeing disclosed a $1 billion charge on its delayed 747-8 jumbo jet program. In August, Boeing had announced it would take a $2.5 billion charge on its 787 Dreamliner program. On Wednesday, Boeing announced that it wrote down another $138 million on the program between August and September.

The quarterly loss of $2.23 per share is more than what analysts had predicted. Various analysts polls by Bloomberg and MarketWatch predicted a quarterly loss of between $1.93 and $2.10 per share.

But Matt Collins, an analyst for Edward Jones, said he wasn’t surprised by Boeing’s results.

“Right now, there’s not much they can say to regain investor confidence,” he said. “They just need to execute. The third quarter is almost a nonissue. It’s what’s going to happen with the 787 and 747-8.”

As a result of the charges, Boeing reduced its earnings per share estimate from July by more than $3 per share. Boeing predicts an earnings per share of between $1.35 and $1.55 for 2009. The company will issue its 2010 earnings estimate in the fourth quarter.

Both Boeing and its commercial rival Airbus have been faced with increasing requests for jet delivery deferrals or order cancellations as airlines struggle with steep air traffic declines. Boeing booked 96 gross orders for commercial jets in the quarter but logged in 17 jet order cancellations. The company delivered 113 aircraft in the third quarter. That’s up from 84 deliveries in the third quarter of 2008. However, 2008’s performance was affected by the Machinists strike.

Because of market conditions, Boeing previously announced a plan to cut its work force by 6 percent or 10,000 positions by year’s end. It’s running a little behind schedule on meeting that goal, McNerney said.

But “we expect to achieve and surpass that target in 2010,” he said.

The additional cuts could come on the defense side or in its services division. Boeing already has slashed 7,200 jobs compared to its November 2008 baseline, including 3,245 in Washington state.

Boeing shares declined 2.5 percent, or $1.28, to close Wednesday at $50.61.

The Associated Press contributed to this report.