Boeing Takes $1 Billion Charge

Oct. 6, 2009
Delays 747-8 flight

Boeing said on Oct. 6 it it expected to take a one billion dollar charge against third-quarter earnings due to increased production costs and a difficult market for its 747-8 program.

It also said that the the first flight of the 747-8 widebody commercial plane, the latest evolutionary variant of the Boeing 747 jumbo jet, would be delayed to early next year.

About $640 million of the charge reflects higher estimated costs to produce the plane at both Boeing and supplier facilities, the company. The remainder relates to the company's decision to maintain production rate at 1.5 planes per month nearly two years longer than previously planned and deferring an increase to two per month.

"Because the 747 program is in a loss position, costs associated with the factors above will be immediately recorded in the third quarter for future 747-8 deliveries," Boeing said.

The company now expected the first flight of the 747-8 plane to occur by early next year -- instead of late 2009 -- with the flight test program taking place in 2010.

First delivery of the 747-8 Freighter is now expected in the fourth quarter of 2010 and that of the of the intercontinental passenger variant remains scheduled for the fourth quarter of 2011.

Boeing said it would update its 2009 financial guidance on October 21 when it reports third-quarter results.

Copyright Agence France-Presse, 2009

About the Author

Agence France-Presse

Copyright Agence France-Presse, 2002-2024. AFP text, photos, graphics and logos shall not be reproduced, published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP shall not be held liable for any delays, inaccuracies, errors or omissions in any AFP content, or for any actions taken in consequence.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!