Banking

Boeing Stock Falls On New Headwind To Production, Deliveries

Boeing (BA) plans to cut production of its 787 Dreamliner as it looks to resolve another issue, forcing another slowdown to deliveries. Boeing stock fell.




X



The new issue was found in the forward pressure bulkhead at the front of the plane, involving the skin of the aircraft, sources told the Wall Street Journal.

The problem, which is similar to a previously disclosed issue, doesn’t pose an immediate safety concern. But it could take three weeks to resolve, according to the report.

“Based on our assessment of the time required to complete this work, Boeing is reprioritizing production resources for a few weeks to support the inspection and rework,” Boeing said in a statement Tuesday. “As that work is performed, the 787 production rate will temporarily be lower than five per month and will gradually return to that rate.”

This will also further impact 787 deliveries, which saw a pause earlier this year that created a buildup of 100 planes. Now the Dow Jones aviation giant expects to deliver less than half of the Dreamliners in its inventory this year. That’s down from an earlier estimate of nearly all its completed planes.

Earlier production problems that plagued the 787 Dreamliner included gaps in the vertical tail fin that could cause strain on the structure of the plane. Also, parts in the horizontal stabilizer were clamped with greater force than specified.

Boeing’s manufacturing processes have come under fire since two deadly crashes of its 737 Max jet. Investigations into Boeing’s certification process further exposed a toxic work culture, and warnings from some employees said overworked factory staff were making mistakes.


IBD Live: A New Tool For Daily Stock Market Analysis


787 Woes May Weigh On Boeing Stock

Shares fell 3% to 231.16 on the stock market today. Boeing stock is consolidating with a 278.67 entry point but is hitting resistance at the 50-day line. Top 787 supplier Spirit AeroSystems (SPR) was down 2% and engine maker General Electric (GE) dipped 0.6%.

Boeing also said Tuesday that it delivered 75 commercial aircraft in the second-quarter and 156 year to date. That’s up from 50 737 jets a year-ago in Q2 and 113 on the year for 2020.

But another halt in 787 deliveries this year will weigh on cash flow and Boeing stock while 737 deliveries are still ramping up.

The new pause also comes as airlines are expanding service as travel rebounds during the peak summer season.

Meanwhile, Boeing’s other widebody plane, the 777X, faces separate delays as regulators seek more testing and data on its software.

Follow Gillian Rich on Twitter for aviation news and more.

YOU MAY ALSO LIKE: 

See The Best Stocks To Buy And Watch

Is Boeing Stock A Buy As 737 Max Orders Climb?

MarketSmith: Research, Charts, Data And Coaching All In One Place



Most Related Links :
reporterwings Governmental News Finance News

Source link

Back to top button