Boeing shares lower after company forecasts $2.05 billion Q2 charges
Shares of Boeing Co. fell more than 1% in late trading Thursday after the aircraft maker warned second-quarter charges will reach $2.05 billion, stemming from setbacks and difficulties in three separate programs and including problems related to weaker air-cargo market trends. In its 787 program, Boeing decided not to invest funds for the refurbishment and sale of the two remaining unsold flight test aircraft. The costs associated with these aircraft were reclassified to research and development expenses, resulting in a non-cash after-tax charge of $847 million, Boeing said in a statement. Moreover, due to "current and anticipated weakness" in the air-cargo market, Boeing will no longer increase the production rate of its 747-8 aircraft in 2019, resulting in a $814 million after-tax charge, also reflecting lower estimated revenues on future aircraft sales. The company will also recognize a $393 million after-tax charge related to its KC-46 Tanker program, to account for higher costs associated with the previously announced program schedule and technical challenges, Boeing said. Boeing will update its 2017 guidance when it reports second-quarter earnings on July 27, the company said.
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