BOEING Co, the second-largest commercial plane maker and defense contractor, said yesterday profit fell 38 percent after a strike by machinists halted aircraft deliveries and that it can't confirm its previous income predictions.
Third-quarter net income fell to US$695 million, or 96 cents a share, from US$1.11 billion, or US$1.44, a year earlier, trailing analysts' average estimate. Revenue fell 7.4 percent to US$15.3 billion, hurt by the walkout that began on September 6, the Chicago-based company said in a statement yesterday.
Deliveries, which determine when Boeing gets paid, dropped 23 percent last quarter after its 27,000 machinists stopped work in a dispute over job security and compensation. The walkout, now in its seventh week, and supplier delays with galleys cost the company 60 cents a share in the quarter. The stoppage is also further delaying the new 787 Dreamliner that Boeing is counting on to help it surpass larger commercial rival Airbus, Bloomberg News said.
"The impact of the Boeing strike has replaced the concern on oil in the near term" for the industry, Myles Walton, a Boston-based analyst with Oppenheimer & Co, wrote in an October 15 note. Analysts predict the walkout will hurt earnings even more in the fourth quarter.