Boeing's Dreamliner Timetable Concerns Analysts

Several analysts feel 787 plans are 'aggressive and potentially unachievable'; concerns obscure positive factors like strong backlog, market share gains and possible buybacks.

NEW YORK (AP) β€” Boeing Co.'s lower 2008 revenue outlook overshadowed strong third-quarter earnings and sparked more questions related to the timetable of its much anticipated 787 Dreamliner, analysts said Thursday.
After Wednesday's closing bell, Boeing reported solid third-quarter results that topped Wall Street expectations, driven by performance in its commercial aircraft segment.
Earlier this month, Boeing said it will delay its first delivery of the 787 because of assembly problems. Boeing still backed its 2007 and 2008 profit outlook and said the delay will not affect earnings.
But Boeing on Wednesday lowered its 2008 revenue outlook to between $67.5 billion and $68.5 billion, from a previous estimate of $71 billion to $72 billion.
Several analysts, including Banc of America Securities' Robert Stallard, said investors are still focusing on the Dreamliner's timetable.
''We think that investors remain concerned that the 787 ramp and plans to retrofit any flight test changes into early production aircraft are aggressive and potentially unachievable,'' Stallard wrote in a client note.
Stallard said the concerns obscure positive factors like strong backlog, market share gains and possible buybacks.
He kept a ''Buy'' rating and $112 price target on the stock for Boeing's long-term value.
JPMorgan analyst Joseph B. Nadol III noted that Boeing's new 787 program manager, Pat Shanahan, was not involved in revising the delivery and production schedule announced two weeks ago.
Boeing said the likelihood of changes to its new plan was ''remote,'' but Nadol still wondered why Shanahan was not involved. ''We have qualms about the initiation of a new plan without guidance and complete buy-in from the new leader,'' Nadol wrote in a client note.
Nadol kept a ''Neutral'' rating on the stock and expects shares to be rangebound until Boeing updates Wall Street on how the Dreamliner is progressing.
''With earnings behind us and most major defense contract awards pushed out into next year, all attention will be focused on the 787,'' Nadol wrote.
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