HARTFORD, Conn. (AP) -- Analysts cut their estimates on two aerospace companies Tuesday, saying the 17-day strike at Boeing Co. will be longer than expected.
Patrick J. McCarthy, an analyst at Friedman Billings Ramsey said in an investor's note that the strike by the International Association of Machinists will last two months. He lowered earnings-per-share estimates for Spirit AeroSystems Holdings for the last two quarters of 2008 and the full year.
"However, with sentiment in the space so negative, we believe that current valuations already reflect a worse-case scenario for the commercial aerospace stocks," he said.
He maintained an "Outperform" rating and $33 price target.
Earlier this month, Spirit AeroSystems, which designs and manufactures fuselages, propulsion systems and wing systems for commercial and military aircraft, said it will cut production on some Boeing products in response to the strike. The company said it will reduce the work week to three days for employees who support, manufacture and assemble affected products.
Boeing is Spirit's main customer.
Analyst Yvonne M. Varano of Jefferies & Co. lowered her estimates Barnes Group Inc., which manufactures and distributes precision metal parts and distribute industrial supplies.
"There is no change to our belief that Barnes is well positioned to benefit from the anticipated demand for key Boeing aircraft such as the Dreamliner," she said in an investor's note. "However, with the current labor situation at Boeing we are now taking a more conservative view toward our earnings expectations."
Barnes Aerospace manufacturers and maintains components and assemblies for aircraft engines, airframes and industrial gas turbines.
Shares of the Barnes Group fell 6 cents to $21.90 in morning trading, while Spirit AeroSystems fell 3 cents to $17.27.
