Boeing shares slump as 737 earnings hit is weighed

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[NEW YORK] Boeing shares slumped Monday on the company's weakened profit outlook after it announced last week it would cut production of 737 planes following two deadly crashes. Read more at The Business Times.

Boeing shares slumped Monday on the company's weakened profit outlook after it announced last week it would cut production of 737 planes following two deadly crashes.[NEW YORK] Boeing shares slumped Monday on the company's weakened profit outlook after it announced last week it would cut production of 737 planes following two deadly crashes.

The 737 Max has been grounded worldwide after suffering two crashes in five months that killed nearly 350 people. The Federal Aviation Administration has signaled it will take a cautious approach before clearing the planes to resume operations.Bank of America Merill Lynch predicted the"disruption" to the 737 line would last six to nine months, up from the prior estimate of three to six months. The bank also trimmed its profit forecast for this year and over next four years.

Morningstar also said the announcement likely meant a longer grounding period, estimating that earnings would decline US$1.11 per share. However, Morningstar said Boeing should be able to ramp up monthly production of the planes to 57 aircraft before hitting the mid-60s in the next decade. "Longer term, strong aerospace demand, Boeing's strong order book and backlog and track record of execution are likely to weigh out, we think," CFRA Research said.S&P Global Ratings said its rating was unaffected, writing that the company"has sufficient liquidity and cushion in the rating to weather the MAX grounding."

 

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