Uncertainty dogs 787 deliveries, MAX approval ahead of Boeing Q3
27 Oct 2021
Hopes of an imminent breakthrough in deliveries of Boeing (NYSE:BA) Co’s 787 jetliner were fading on Tuesday after a top supplier reported a lull in activity and two industry sources said the jet maker continued to wade through lingering factory problems.
Boeing shares fell 1.4% on the eve of quarterly earnings due on Wednesday, reaching their lowest level since Sept. 21 as uncertainty continues to plague its main commercial programs.
More than 100 long-haul 787s are parked, locking up an estimated $9 billion in cash, after a series of manufacturing issues over the past two years compounded weak demand.
“There is a substantial risk that Boeing will recognize a charge related to the program at Q3 results,” Bernstein analyst Doug Harned wrote last week.
The 787 problems have stifled a crucial source of cash as Boeing’s main cash cow, the 737 MAX, recovers gradually from a two-year safety crisis triggered by fatal crashes.
“We are progressing through our comprehensive inspections and reviews, and will continue to take the time necessary to meet the highest standards, while coordinating closely with our suppliers and customers,” a Boeing spokesperson said on Tuesday when asked about the 787 issues.
While the MAX received Western approvals late last year, Boeing faces renewed uncertainty over the timing of its re-entry to service in China, which drives a quarter of its sales.
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TRADE SIGNAL – : Boeing (NYSE:BA) – SELL: 209.56, TARGET: 208.21, STOP LOSS : 211.74