C-17 Fears Hurt McDonnell Stock

McDonnell Douglas shares plunged 10.7% Friday, losing $5.625 per share to $47.125, on investor concern over the C-17 cargo jet, analysts said.

For the full week, McDonnell shares have lost nearly 18% in New York Stock Exchange trading.

Analysts could not identify a single cause for the drop, but McDonnell has received bad news this week on several fronts about the C-17. A spokesman said McDonnell does not comment as a matter of policy on stock price movements.

Chairman John McDonnell met with aerospace analysts Thursday, but analysts said he made no disclosures that would account for the price movement.

Wolfgang Demisch, aerospace analyst at UBS Securities, said investor concerns were heightened by reports that the C-17’s engines are burning 2.8% more fuel than expected and by congressional action to reduce fiscal 1993 funding for the program.

Brig. Gen. Kenneth Miller, C-17 program manager, said recently that the Air Force set up an improvement program last fall after projections that the aircraft would not meet its range and payload requirements.