Analysts: Dreamliner Delay A 'Bit Of Turbulence'

Supplier problem may have caused Boeing delay, but analysts say new first-flight date is more reasonable.

NEW YORK (AP) — Analysts on Thursday viewed Boeing Co.'s disclosure of a delay in deliveries of its 787 Dreamliner as a brief setback and said its new deadline for first flight is more reasonable.
 
On Wednesday, Boeing said it would delay initial deliveries of the 787 by six months because of assembly problems. Boeing has reported trouble getting the right parts from its suppliers on time as well as shortages of fasteners and other small parts that hold large sections of the plane together.
 
Jefferies & Co. analyst Howard A. Rubel said he did not expect a long-term impact from the slip, what he deemed ''a bit of turbulence,'' and kept a ''Buy'' rating on the stock and a $122 price target.
 
Regarding the delay, Rubel said larger fasteners may not have been available to replace temporary fasteners.
 
He also noted that Boeing has gone back to its suppliers to find out exactly where the delays started and established a new target for first delivery that gives room for potential problems that may turn up during flight testing.
 
Aside from the 787, Rubel said Boeing's other programs are performing well and expects cash flow for 2007 to top his current estimate. He also expects a dividend increase and more share repurchasing.
 
Morgan Stanley analyst Heidi Wood said the 787's first flight deadline of the 2008 first quarter and first delivery deadline of November or December of 2008 ''looks achievable.'' Wood, who has a ''Buy''-equivalent rating on the stock and a $140 price target, said she still expected airline orders to remain firm.
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