Boeing shares slide; investors brace for slow deliveries, profit hit
By Alwyn Scott
SEATTLE (Reuters) - Boeing Co braced investors on Wednesday for a rough 2016, forecasting lower-than-expected earnings and fewer plane deliveries largely because of production changes needed to boost output later in the decade, news that sent its stock down sharply.
The world's largest plane maker said it still sees a strong market for new aircraft despite slowing global growth and low oil prices.
Boeing said it expects passenger traffic to keep rising and announced plans to notch up 737 output to 57 a month in 2019. That would be the highest level ever for the single-aisle plane, as Boeing fights to slow rival Airbus SA's inroads. It is increasing 787 and 767 production as well.
Investors focused on the short-term pain, and sent Boeing stock to its lowest since August 2011. Boeing tumbled 8.9 percent, its biggest daily decline since October 2001, to close at $116.58 on the New York Stock Exchange. It was the biggest decliner in the Dow Jones Industrial Average.
PRODUCTION CUT SURPRISE
The 737 production cut surprised analysts who had expected Boeing to maintain rates rather than risk losing market share to Airbus.
Boeing last week announced a production cut in the 747-8, now mainly a freight aircraft, that it said will keep the line running until retirement of older planes picks up in 2019. Continued...