EVERETT — Even a reported 17 percent boost in the Boeing Co.’s second-quarter earnings did little to distract concerns over the company’s delayed 787 Dreamliner.
“Much to our disappointment, the 787 continues to challenge us,” Jim McNerney, Boeing’s chief executive, told Wall Street analysts and media during an earnings call Wednesday.
When they postponed the 787’s first flight last month, Boeing executives called a structural weakness in the 787 “limited” and “manageable” and promised a new schedule within weeks. Many industry observers expected an update when Boeing reported its earnings Wednesday.
“People are just waiting,” said Richard Aboulafia, an In the absence of a company update, “I think people are quite free to believe whatever guidance is out there.”
And there are several estimates circulating about Boeing’s latest 787 delay. Boeing originally was expected to deliver the first mostly composite Dreamliner in May 2008 but hasn’t put its fuel-efficient jet in the air yet.
Following the June delay, brokerage firm Morgan Stanley estimated that Boeing won’t fly its Dreamliner for three to six months, pushing back the first 787 delivery from first quarter 2010 into 2011. In the last 48 hours, media reports, blog entries and online discussions pegged the delay between three and 12 months.
Boeing’s McNerney said the company will provide a new schedule, along with the company’s financial projections for 2010, by the end of September. Boeing reiterated its 2009 profit forecast of $4.70 to $5 per share. Analysts expect a profit of $4.52 per share.
But Peter Arment, an analyst at Broadpoint AmTech, said Boeing’s guidance was unreliable because it doesn’t reflect the revised 787 schedule. “So I think the air of uncertainty will remain regarding Boeing,” he said.
Boeing’s 787 troubles come at time when airlines are deferring jet deliveries due to the global economic downturn. Having the Dreamliner on track would have been a good economic insulator for the company, analyst Aboulafia said.
Still, Boeing’s McNerney served up a tidbit of good news for workers here in Everett: the company doesn’t see further jet production cuts beyond the previously announced slowing of 777 assembly next year. Boeing announced earlier this year that it would cut 10,000 jobs across the company, 4,500 from commercial airplanes.
Boeing received 70 requests for jet delivery deferrals in the second quarter, and 60 were requested in the first quarter. But deferral requests are slowing, McNerney said.
Both McNerney and James Bell, Boeing’s chief financial officer, expressed confidence in the long-term outlook for the Dreamliner.
“There is nothing we have learned to lead us to believe that this is anything but a local issue which can be addressed with a local fix,” McNerney said.
In its regular review of the 787 program, Boeing still sees its 787 as a profitable venture, Bell said. Boeing’s gross inventory on the 787, which includes work in process, supplier advances, tooling and nonrecurring costs, stands at $7.9 billion, Bell said.
“We have sold 850 of these and we know we are way ahead of our competition,” Bell said.
The Associated Press contributed to this report.
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