Uncertainty dogs 787 deliveries, MAX approval ahead of Boeing Q3 -Breaking
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© Reuters. FILE PHOTO : A screen shows the Boeing logo at New York Stock Exchange (NYSE), New York, U.S.A, on August 7, 2019. REUTERS/Brendan McDermidEric M. Johnson
SEATTLE, Reuters – There was little hope of a rapid increase in Boeing (NYSE) deliveries. A top supplier had reported a lull in activity on Tuesday. Two industry sources claimed that Boeing continued to struggle with lingering problems at its factory.
Boeing shares plunged 1.4% as they prepare for quarterly earnings, which are due Wednesday. This is the lowest point since September 21st.
After a string of manufacturing problems over the last two years, more than 100 long haul 787s have been parked. This locks up $9 billion worth of cash.
Doug Harned, a Bernstein analyst wrote that there is “a significant risk” that Boeing would recognize the charge at Q3 results.
Boeing’s 787 issues have drained a vital source of cash. The 737 MAX is slowly recovering from a 2-year safety crisis triggered two years ago by fatal crashes.
Boeing spokeswoman said Tuesday that the company was continuing to complete its comprehensive inspections, reviews and would continue to work closely with suppliers and customers to ensure the best standards.
Boeing remains uncertain as to when the MAX will be re-entered into service in China. China is responsible for a quarter its annual sales.
Sources said that while China was expected to approve MAX in November, there are increasing chances this will not happen next year.
China’s regulator didn’t respond to our request for comment.
Boeing spokesmen declined to discuss China or MAX.
Although Boeing and Chinese regulators successfully completed a test flight recently, tensions over the clearance have risen with the United States.
Boeing had previously stated that this year’s delivery of 10 to 15 787s would be less than the anticipated “vast majority”, as opposed to the usual 100. This year, it has delivered 14.
One industry source said that there is little chance of a significant number being delivered by year’s end, but that it was possible for a few deliveries to be made.
According to one supplier, Boeing has not provided parts manufacturers with an indication about its timing. This leaves uncertainty regarding the delivery schedule.
Raytheon Technologies (NYSE :), which provides a variety of systems, stated Tuesday that it would not ship anything to the 787.
Boeing is currently dealing with issues with its manufacturing processes that caused structural defects to the 787. They have stopped deliveries twice, the most recent being in May.
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