Boeing (BA -1.4%) plunges as much as 4% after making fewer 737 deliveries than expected and news that the company had failed to advise pilots of new safety systems on the 737 MAX, which may have played a role in the recent Lion Air crash.
Boeing's financial guidance is "at risk after it delivered only 57 airplanes and 43 737s in October," compared to the 72 737s per month the company needs to meet its 2018 build rate, says Bloomberg Intelligence analyst George Ferguson.
Boeing "also trails on deliveries of its high-margin MAX aircraft, which affect profit disproportionately, with the plane accounting for 37% of the total vs. guidance of 40-45%," Ferguson says.
Jefferies analyst Sheila Kahyaoglu says the firm's estimate "assumes deliveries of the 737 reach an average rate of 70/month in Nov.-Dec., which appears feasible, but rather difficult."
On reports that Boeing withheld information about potential hazards associated with a new flight control feature suspected of playing a role in last month’s fatal Lion Air jet crash, Bernstein analyst Douglas Harned says "we do not know, at this stage, if following the procedure would have prevented the Lion Air crash."
Source: Bloomberg First Word
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