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A Boeing Buying Opportunity?

Boeing's Charges

This isn't meant to be an in-depth analysis of the aerospace sector or Boeing Company (NYSE:BA). Instead I hope to present a buying opportunity that may come about as BA reports earnings. For an in-depth look at BA, from both the financial aspect and the aerospace aspect, I would recommend some of Dhierin Bechai's excellent pieces on the airline. But for my take on the airline's next earnings report, BA noted on July 21 that it would be recognizing a series of charges and cost reclassifications during Q2 2016 that would total an after-tax earnings impact of $2.1 billion. The charges will be comprised of costs related to the 787 line, the 747 line, and the KC-46 program. On the 787 line, BA chose not to invest any further funds to refurbish and prepare for sale two unsold test aircraft. These test craft were built in 2009, booking over 6,700 hours of testing between them. Charges for these aircraft will reach $847 million, or $1.33/share. The company also plans not to increase the production rate of the 747-8 to 1.0/month in 2019. Instead the production rate will remain at 0.5/month because of anticipated weakness in the air...


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