ATLANTA (Reuters) On Thursday August 27, 2009, 10:40 am EDT - Boeing Co (NYSE:BA - News) said on Thursday its 787 Dreamliner would make its first flight by the end of this year, with initial delivery expected in the fourth quarter of 2010, and its shares shot up 8 percent. Reuters - The Boeing company's first 787 Dreamliner is readied for its first test flight, scheduled for June, at the ...
Alex Hamilton, an analyst with Jesup & Lamont Securities, said Boeing's statement helped ease some questions that have surrounded the carbon-composite 787.
"There was a lot of uncertainty and a lot of the chatter on the street was 'would this aircraft ever fly?'" he said. "It sort of ends the uncertainty."
Boeing, the No. 2 plane maker behind EADS (Paris:EAD.PA - News) unit Airbus, also plans to take a third-quarter charge. The manufacturer said it has concluded that the initial test-flight planes of the long-delayed 787 have no commercial market value because of necessary modifications that have been made.
It added that costs previously recorded for the first three test planes would be reclassified as a research and development expense, resulting in an estimated pretax charge of $2.5 billion, or $2.21 a share, against results for the third quarter.
Analysts were expecting a profit of $1.21 a share for the third quarter, according to Reuters Estimates.
Hamilton said the updated outlook likely meant Boeing would post a loss for the third quarter.
"This is money that was already spent and this is money that they're reclassifying as an R&D expense ... The message should be clear -- it's still an economically viable aircraft," Hamilton said.
The date of the first test flight has been delayed repeatedly because of production problems and a two-month labor strike.
The latest delay was in June, when Boeing said the plane would not fly as scheduled during the second quarter so it could address a structural problem.
The company, which had said earlier this year that the first 787 deliveries to customers could occur in the first quarter of 2010, also said it projects achieving a production rate of 10 airplanes per month in late 2013.
Boeing shares were up 8 percent, or $3.79, at $51.61 in morning New York Stock Exchange trading. Shares of 787 suppliers such as Spirit AeroSystems Holdings (NYSE:SPR - News) and Rockwell Collins (NYSE:COL - News) also gained.
Open Casting for "Jesus Christ Superstar" - [image: Open Casting for Jesus Christ Superstar] Would you wish to expose your acting, dancing and singing chops in a local production? The Argenta Commun...
5 years ago