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Do Boeing Investors Have Their Heads in the Sand?

As for Boeing's earnings day optimism, Leake wrote: "Other than the large overhang of the 787 grounding, this quarter's strong operating performance (both cash and EPS) would likely have marked a turning point for Boeing as it seemed to us the 787 was finally on a clear path to cash break even.

"But we are reminded of the old saying, "Other than that Mrs. Lincoln, how was the play?" when discussing any non-787 related positive trends," Leake wrote. "Nothing else matters until Boeing can prove that the 787 will be delivering again in short order.

"Investors should understand that Boeing's decision to forge ahead with its original production rate plans is borne out of necessity, for if Boeing is ultimately forced to slow 787 production, the aggressive learning curve assumptions used to achieve the lofty free cash flow projections in current estimates would certainly not be achieved," he said.

Of course, in discussing the 787 program meltdown, it is necessary to recall two other aircraft -- the 737 and 777-- and to remember that Boeing is really two companies: Good Boeing builds two of the most successful airplanes in the world while bad Boeing experiments with the 787.

Ultimately, for investors, the question remains what it has been for years: Can good Boeing's continued success overcome bad Boeing's excessive experimentation?

On Jan. 29, Boeing said it had begun assembly of the first 737 to be built at the rate of 38 airplanes per month, part of its previously announced effort to boost production from 31.5 aircraft per month two years ago to 42 aircraft per month in 2014.

On Feb. 2, the Nikkei newspaper reported that ANA is in talks with Boeing to speed up delivery of three 777 aircraft that had been scheduled for delivery later this year.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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