Aerospace giant Boeing Company (BA) announced that the consumers have to wait a little longer for the 787 passenger jetliner, as the first delivery is now expected mid-way through first-quarter 2011.
Boeing had earlier expected to deliver the first 787 to Japan’s All Nippon Airways later this year. In July, the company rescheduled the delivery date and said the first 787 will be delivered within the first few weeks of 2011, citing supplier workmanship issues related to the horizontal stabilizer and instrumentation delays.
Boeing once again postponed the delivery date this month, owing to a holdup in availability of engines needed for the final phases of flight test this fall. Boeing is working closely with Rolls-Royce, the engine maker, to expedite engine availability. The company expects flight testing across the test fleet to be conducted as planned.
As it is, the 787 program is currently running two years behind schedule with the current delays adding to the waiting period of the consumers. The previous delays in launching the 787 jetliner were due to faulty parts from suppliers. Boeing assembles the different parts of the airplanes and depends on its suppliers from around the world to build a large portion of the aircraft.
Boeing’s 787 is the first passenger jetliner of which the major portion will be manufactured from lightweight and environmentally friendly composite material — a break from traditional materials like aluminum and titanium that were generally used for manufacturing. The new airplane of the company will also be fuel efficient, consuming 20% less fuel than those of its peers.
Currently, Boeing has 847 orders for the 787. The orders for the much-delayed jetliner are in the negative for 2010 as the company has received 32 cancellations for its 787 since the beginning of 2010 and just 28 new orders. The basic model of 787 costs around $161 million and can be configured in two versions, a 787-8 carrying 210-250 passengers and a 787-9 carrying almost 300 people.
During the second quarter earnings call, Boeing provided earnings guidance of $3.50 per share to $3.80 per share for 2010. The company does not expect the delay in the delivery dates of the 787 jetliner, spilling into next year, to impact the financial expectation of the company.
The Zacks Consensus Estimates for third quarter fiscal 2010, fiscal year 2010 and fiscal year 2011 are $1.04 per share, $3.92 per share and $4.93 per share, respectively.
Boeing currently retains a Zacks #3 Rank (short-term Hold rating). We also maintain a Neutral rating on the stock.
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