Boeing shares fall on warning
Boeing Co. shares stumbled Monday after a Wall Street analyst said that aircraft orders might have peaked and that the company could face delays in producing the new 787 passenger jet.
Last year, Boeing booked 1,044 orders for its airplanes, topping its previous record of 1,002 in 2005 and enabling the company to beat European archrival Airbus for the first time since 2000.
But Wachovia Securities analyst Joseph San Pietro in New York said in a note to clients that Boeing orders had peaked and warned investors that they “don’t want to be left holding the bag.” A peak in orders usually leads to a peak in Boeing shares, he said.
Boeing shares fell $3.03, or 3.4%, to $85.60. The stock has risen 29% in the last year.
The analyst added to Wall Street jitters by writing that production problems at Boeing’s key suppliers could increase costs and delay first deliveries of the 787 jet by three to six months.
Chicago-based Boeing has sold 448 787s, the company’s first new aircraft in a decade. A 787 costs about $138 million to $188 million, depending on how it is configured.
Wall Street has been particularly mindful of potential production woes after Airbus delayed delivery of its A380 super-jumbo jet by nearly two years because of wiring problems, causing its parent company to post a loss last year.
San Pietro said a “couple of Asian-Pacific carriers have been told as of now to expect delays in delivery” of their 787s.
But Boeing executives Monday vehemently denied that any carriers had been told of a delay, saying that although there were “pockets” of suppliers that were behind schedule the company had implemented contingency plans to recover from any production slippages.
“We have every intention of meeting the scheduled delivery in May 2008,” said Yvonne Leach, a spokeswoman for Boeing in Everett, Wash.
Boeing also said that it could not predict how many orders it would get this year but added that the “fundamentals of the industry are strong, pointing to another good year.”
Although international carriers have driven a surge in orders the last two years, domestic airlines recovering from the fallout of the 2001 terrorist attacks could pick up any slack, said analyst Paul H. Nisbet of JSA Research Inc. in Newport, R.I.
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Times wire services were used in compiling this report.
