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Boeing posts 3Q loss of $1.6B

Oct. 21, 2009 – Boeing Co. lost US$1.6 billion in the third quarter as hefty charges from its delayed 787 and revamped 747 dragged down results. Those charges also forced the airplane maker to slash this year's profit forecast.

Shares of the Chicago-based company fell 59 cents, or one per cent, to US$51.30 in pre-market trade after results were announced Wednesday.

Boeing, the world's second-largest commercial plane maker after Europe's Airbus, has struggled with a series of setbacks: production problems have delayed its eagerly awaited 787 passenger aircraft and a bigger version of its 747 jumbo jet, resulting in write-downs and additional design and manufacturing costs.

The expected charges, totalling $3.62 billion, led the company to cut its 2009 profit forecast to $1.35 to $1.55 per share, down from $4.70 to $5 per share. Analysts had predicted $1.53.

Earlier this month, Boeing said it planned to record a $1 billion charge because of delays of its 747-8 jet.

That was the second time in four months the company had postponed a new aircraft model.

In June, it announced the latest of several delays of its 787, a highly anticipated passenger jet designed for fuel efficiency with carbon composite parts. That plane, Boeing's best-selling new plane, is more than two years behind schedule.

Boeing said it would book a $2.5 billion charge in the third quarter for the first three 787 test planes, which lack commercial value. On Wednesday, Boeing disclosed an additional charge of 14 cents per share for spending on those planes in August and September. The company plans to fly the 787 for the first time by the end of the year.

The 747 has been flying for four decades and is one of the world's best-known airplanes. The 747-8 version was unveiled in 2005 and is designed to be larger and more fuel-efficient. The passenger version of the 250-foot plane, called the Intercontinental, seats 467 passengers.

The plane setbacks have damaged Boeing's credibility among analysts and investors.

Meanwhile, weak demand for air travel and cargo services has undermined demand for Boeing's jetliners since the global economy deteriorated late last year. Some customers have been forced to cancel or delay plans to buy new aircraft.

Boeing's quarterly loss amounted to $2.23 per share. That compared with earnings of $695 million, or 96 cents per share, a year earlier.

Sales from the company's defence business, which makes fighter jets, satellites and security systems and accounts for about half the company's overall revenue, lifted revenue 9 per cent to $16.69 billion in the latest quarter. However, revenue a year earlier was reduced by $2.1 billion by a labour strike and problems with suppliers.

Analysts expected a loss of $2.12 per share on revenue of $17.16 billion. Wall Street estimates typically exclude one-time charges.

Boeing said its order book shrank 2 per cent during the quarter, to $320 billion, due to dwindling demand across its commercial airplane and defence businesses.