Boeing resumes deliveries of 787 Dreamliners

Tue May 14, 2013 7:18pm EDT
 
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By Alwyn Scott

NEW YORK (Reuters) - Boeing Co (BA.N: Quote) resumed deliveries of its high-tech 787 Dreamliner jet on Tuesday, ending a period of nearly four months in which it was unable to provide new planes to customers because of safety concerns about the battery system.

The delivery of the first jet with a redesigned battery system marks a turning point in Boeing's 787 crisis, allowing the jet maker to book revenue for completed sales of the jet, which costs $207 million at list prices.

Boeing shares rose 1.4 percent to close at $96.11 on the New York Stock Exchange, their highest levels since November 2007.

Resuming deliveries will lower Boeing's profit margin in the near-term, though. The 787s being delivered now are among the relatively early jets that are more costly to make and that were sold at steep discounts to attract customers.

Boeing has never given a final cost estimate for the 787's grounding and repairs, though it absorbed nearly all of the impact in the first quarter while still posting a rise in profit. Some analysts have projected a final cost of as much as $600 million.

The deliveries will improve Boeing's cash flow this year, however, and will reduce its inventory, something investors have been anticipating as they bid up its stock.

Boeing said it delivered a new Dreamliner to All Nippon Airways (9202.T: Quote) on Tuesday, its second delivery of the year. The first was delivered before January 16, when regulators grounded the worldwide Dreamliner fleet after two lithium-ion batteries overheated and smoked on two separate jets that month.

Boeing also reaffirmed Tuesday that it expects to hit its target of delivering more than 60 787s this year.   Continued...

 
The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young