Boeing Down After Saying Additional Rework Needed on Undelivered 787s
July 13 2021 - 3:02PM
Dow Jones News
By Michael Dabaie
Boeing Co. shares were down 3.6% to $229.74 after the company
said it identified additional rework needed on undelivered 787s,
and said 787 production will temporarily be lower than five per
month.
Boeing said it has been talking with the U.S. Federal Aviation
Administration on verification methodology for 787 fuselages and
conducting inspections and rework. The company said it identified
additional rework needed on undelivered 787s.
Boeing said it is reprioritizing production resources for a few
weeks and the 787 production rate will fall below five per month
before gradually returning to that rate. Boeing said it now expects
to deliver fewer than half of the 787s currently in inventory this
year.
The Wall Street Journal, citing people familiar with the matter,
had reported Monday that a new production problem has surfaced with
Boeing's 787 Dreamliner, likely further delaying deliveries.
Boeing said Tuesday its 787 deliveries in the second quarter
were 12, with 14 year to date. Among its major commercial airplane
programs, the company delivered 79 in the quarter and 156 in the
year-to-date period.
Vertical Research Partners in a note said it is retaining its
Hold rating on the stock.
"While the sub-par delivery number for 2Q21 should come as no
surprise to investors, we think that there will be some
disappointment about the additional 787 issues, and cut to the
delivery/production forecast," Vertical Research Partners said.
"This again gives the impression that Boeing has not got its
house in order, and that it is falling further behind as other
aerospace companies start to enjoy the early signs of an aerospace
recovery," the Vertical Research note said.
"We plan to formally update our Boeing estimates in our 2Q21
earnings preview this week, but the delivery numbers and updated
787 forecast clearly put downward pressure on our numbers,"
Vertical Research said.
Write to Michael Dabaie at michael.dabaie@wsj.com
(END) Dow Jones Newswires
July 13, 2021 14:52 ET (18:52 GMT)
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