Boeing Outlines Charges

The jetmaker will end production of its 717 jet, a decision that will hit fourth-quarter results.
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Boeing

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shares edged higher Friday even though the jetmaker outlined massive charges covering a production halt to its 717 model and development costs for its controversial tanker refueling program.

The company announced charges of $615 million, or 48 cents a share, related to the U.S. Air Force 767 Tanker program and expenses incurred to end production of the 717. These charges will show up in fourth-quarter and full-year 2004 results scheduled to be released on Feb. 2.

Prior to the announcement, analysts were expecting earnings of 50 cents and $2.58 respectively, according to Thomson First Call.

Charges related to the initial production of the aerial refueling tanker for the U.S. Air Force are about $275 million pretax, or 21 cents a share.

Boeing said it "remains firmly committed" to the tanker program, which is being reviewed by the Pentagon after an initial deal was scuttled by controversy.

The company said $340 million pretax, or 27 cents a share, is attributable to the decision to end production of the 717 commercial jet in 2006.

"Unfortunately, the overall market for the airplane does not support continuing 717 production beyond delivering on our current commitments," the company said.

Shares rose 5 cents to $50.68.