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Afghanistan Plane Crash Unlikely Linked to Boeing; US Military Investigating

Media reports had suggested a Boeing-made 737-400, carrying 83 passengers, crashed shortly after takeoff some 181 kilometers south of the Afghanistan capital of Kabul.

Boeing Co.  (BA) - Get Boeing Company Report shares extended declines Monday after reports that one of its planes was involved in a crash in the Taliban-controlled Afghan province of Ghazni. 

Later reports, however, indicated that the aircraft involved in the crash could belong to the U.S. Military, and the acting CEO of Ariana Afghan has said none of his company's fleet have been reported missing.

A Taliban spokesperson later claimed responsibility for the crash, while a U.S. Military spokesperson told the Associated Press that the Army was investigating the claims. 

Initial reports had suggested a Boeing-made 737-400 passenger plane, operated by Ariana Afghan Airlines and carrying around 83 people, crashed around 1.10 pm local time near Dih Yak, some 180 kilometers south of the capital Kabul.

Boeing shares were marked 1.63% lower in early trading Monday, essentially in-line with the broader Dow Jones Industrial benchmark, to change hands at $318.00 each. 

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Earlier this month, a Ukraine International Airlines Boeing-made 737 crashed shortly after take-off in Tehran Wednesday, killing all 176 passengers on board, after it was mistakenly shot down by a surface-to-air missile fired by the Iranian military.

Boeing reports fourth quarter earnings on Wednesday, with investors looking for a bottom line of $1.47 per share, a near 75% plunge from last year, on revenues of $21.674 billion.

Boeing is also likely to book a significant 737 MAX-related charge as part of its fourth quarter earnings report after it detailed the weakest annual net aircraft orders in more than two decades last week, noting cancellations and conversions put the total at just 54 aircraft, compared to just under 900 across the whole of 2018.

"We believe new CEO (David) Calhoun has every reason to take a very conservative view on the MAX outlook and the 2020 guidance. Clearly for BA management one of the key lessons of 2019 is the risk associated with overly optimistic assumptions," said Canaccord Genuity analyst Ken Herbert, who cut his price target on Boeing by $20, to $350 a share last week, and left his 'hold' rating unchanged.

"Specifically, we now expect a charge of at least $5 billion in Q4/19 associated with the MAX," he added. "We expect management to take a very conservative view on customer concession costs (and) also believe that with the extended grounding, there is still substantial uncertainty around the ultimate costs to Boeing for the grounding."