Boeing warns of more than $2 billion in charges, shares drop
By Alwyn Scott
(Reuters) - Boeing Co's (BA.N: Quote) second-quarter results will include more than $2 billion in charges related to the 787, 747 and KC-46 tanker aircraft programs, the aerospace and defense company said on Thursday.
Boeing shares fell 1 percent after hours to $132.26 after the company gave notice of its largest write-offs in years, to be detailed in quarterly results on Wednesday.
The combined charges of $2.05 billion address high-profile problems such as dwindling demand for very large planes like the 747 and a hangover of nearly $30 billion in deferred costs from producing the 787 Dreamliner.
They also reflect Boeing's well-known problems with KC-46 tankers for the U.S. Air Force that analysts had expected to hit earnings.
In its announcement, Boeing reaffirmed its forecast for full-year revenue and cash, but said it will update its earnings per share outlook on Wednesday.
"These are the right, proactive decisions to strengthen our business going forward," Chief Executive Dennis Muilenburg said in a statement.
The 787 charge of $847 million after tax, or $1.33 a share, stems from two test planes made in 2009 that remain unsold.
The costs will be reclassified and shifted from 787 inventory to research and development expense, helping to reduce the deferred cost balance, Boeing said. Continued...