Boeing said third-quarter deliveries of commercial airplanes fell 7. 5 percent as last month's Machinists strike halted production, putting...
Boeing said third-quarter deliveries of commercial airplanes fell 7.5 percent as last month’s Machinists strike halted production, putting its annual delivery forecast in jeopardy.
Sixty-two planes were delivered in the period, down from 85 in the second quarter and 67 a year earlier. Only six planes went to buyers during the 28-day strike, bringing the total for this year to 217, Boeing said in a statement yesterday. The company previously had said it expected to deliver 320 jets in 2005.
Airbus, which surpassed Boeing in 2003 as the top maker of commercial aircraft, delivered 82 planes in the quarter.
Airbus delivered 271 planes in the first nine months of 2005, nearly 25 percent more than Boeing. It expects to deliver about 360 jets this year.
Boeing Chief Financial Officer James Bell said last month that as many as 30 deliveries would be delayed because of the strike, which ended last Thursday. Boeing may add overtime hours to reach its 2005 delivery target, company spokesman Peter Conte said.
“That’s going to be pretty challenging,” said D.A. Davidson analyst JB Groh in Portland. “They will have to do more planes per month in the next three months than they have all year, and that is going to cost them some overtime,” Groh said.
Boeing’s fastest monthly production rate this year was 33 planes in April, according to the company’s Web site. It needs to push 103 out the door by Dec. 31 to make its 2005 target.
Conte declined to comment on whether Boeing would be able to meet its forecast. The company books most of its airplane revenues upon delivery.
Income from delayed jets will be recovered in future quarters, Bell said last month.
Machinists voted to return to work after winning a three-year contract that boosted pension payments by 17 percent and left health-care premiums unchanged from the previous agreement.
At the beginning of the strike, Groh estimated a monthlong work stoppage could reduce sales by $2.1 billion and cut profit by at least 14 cents a share. Lost sales would be recovered in a year to 18 months, he said.
Boeing in July increased its forecast for 2005 profit to $2.75 to $2.85 a share, up from an earlier forecast of up to $2.60 a share.
It’s expected to earn $2.79 a share, the average estimate of 21 analysts surveyed by Thomson Financial.
Boeing has not given a third-quarter earnings forecast.
The end of the Machinists strike coincides with the start of talks between Boeing and its 18,000-member engineers and technical-workers union, whose contract expires Dec. 1. The union wants wage increases and a cap on medical premiums.
Round-the-clock talks begin Nov. 1.
If the engineers don’t strike, Boeing should be able to make up its delayed deliveries this quarter, UBS Securities analyst David Strauss wrote yesterday.
Shares of Boeing briefly hit a 52-week high of $68.48 yesterday before closing at $67.95, up 81 cents.
Information from Bloomberg New reporter Andrea Rothman in Toulouse, France, is included in this report.
Spy-satellite launch delayed again
NEW YORK — Boeing said yesterday an oft-delayed launch of a spy satellite hit another snag and would be put off again, another setback for the company’s satellite business.
The satellite’s launch atop a Delta IV rocket from Vandenberg Air Force base in California had originally been scheduled for the fourth quarter of 2004 but has been put back by “various technical issues,” said Boeing spokesman Robert Villanueva.
A problem with insulation protecting engine parts from flames and heat has twice delayed the rocket’s launch, Villanueva said.
He did not say what caused the latest delay but said it was not related to the insulation.
Monday, Boeing said a separate $1.8 billion military satellite program had run into delays after faulty parts were discovered.
That pushed back the launch by 15 months to June 2007.
Last month, sources said the federal government would restructure a $15 billion Boeing contract to develop secret imaging satellites, shifting a big portion of that work to Lockheed Martin.