Tuesday October 6, 04:13 PM
Boeing takes $1 billion charge, delays 747-8 flight
WASHINGTON (AFP) - US aerospace giant Boeing (NYSE: BA - news) said Tuesday it it expected to take a one billion dollar charge against third-quarter earnings due to increased production costs and a difficult market for its 747-8 program.
It also said that the the first flight of the 747-8 widebody commercial plane, the latest evolutionary variant of the Boeing 747 jumbo jet, would be delayed to early next year.
About 640 million dollars of the charge reflects higher estimated costs to produce the plane at both Boeing and supplier facilities, the company said in a statement.
The remainder relates to the company's decision to maintain production rate at 1.5 planes per month nearly two years longer than previously planned and deferring an increase to two per month, it added.
"Because the 747 program is in a loss position, costs associated with the factors above will be immediately recorded in the third quarter for future 747-8 deliveries," Boeing said in a statement.
The company now expected the first flight of the 747-8 plane to occur by early next year -- instead of late 2009 -- with the flight test program taking place in 2010.
First delivery of the 747-8 Freighter is now expected in the fourth quarter of 2010 and that of the of the intercontinental passenger variant remains scheduled for the fourth quarter of 2011.
Boeing said it would update its 2009 financial guidance on October 21 when it reports third-quarter results.
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