is ending its high-speed broadband communications service Connexion by Boeing, saying the offering didn't meet the initial goals the company had set.
"Over the last six years, we have invested substantial time, resources and technology in Connexion by Boeing," said Chairman, President and CEO Jim McNerney. "Regrettably, the market for this service has not materialized as had been expected. We believe this decision best balances the long-term interests of all parties with a stake in Connexion by Boeing."
As initially disclosed in the company's second-quarter financial results on July 26, Boeing expects to recognize a pretax charge of up to $320 million, or 26 cents a share, in the second half of the year, with most of that amount being taken in the third quarter. The company also expects to add about 15 cents a share to its earnings starting in 2007 since it won't be investing further in Connexion.
The charge is for writing down assets, payments of early termination fees and other costs related to shutting down the service. Boeing expects that the majority of Connexion employees will find other jobs within the company.
Shares of Boeing were up 22 cents, or 0.3%, to $79.05.