Boeing plunges into the red in 3Q, reiterates 787 will fly by year-end

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Costs and charges associated with Boeing's delayed 787 and 747-8 programmes pushed the airframer deep into the red for the third quarter.

For the three months ended 30 September, the manufacturer incurred a net loss of $1.6 billion compared to a $695 million profit in the year-earlier period.

Boeing says the results reflect the $2.5 billion reclassification to research and development (R&D) of costs incurred through July for the first three 787 flight-test airplanes and $138 million of spending on those airplanes in August and September.

The previously announced 747 forward-loss of $1 billion is due to increased production costs and difficult market conditions.

Third quarter revenue grew 9% year-over-year to $16.7 billion. Of this amount, Boeing Commercial Airplanes saw an increase of 13% to $7.9 billion on higher deliveries partially offset by lower services volume, while Boeing Integrated Defense Systems saw a 3% rise to $8.7 billion on increased military aircraft deliveries and higher volume in services

Boeing notes that last year's strike and supplier production problems reduced year-ago revenue by an estimated $2.1 billion.

Company chairman, president and CEO Jim McNerney says the 787 cost reclassification and 747 charge "clearly overshadowed what continues to be otherwise solid performance across our commercial production programs and defense business".

He adds: "We look forward to getting the 787 and 747-8 in the air soon and moving forward with flight test and certification for these two important programs."

Boeing has reaffirmed that first flight of the 787 remains on track to occur by the end of 2009, with first delivery scheduled for the fourth quarter of 2010.

The company has also reaffirmed its 2009 revenue guidance at $68 billion to $69 billion. It will issue financial guidance for 2010 with its fourth quarter results.