stock slipped in premarket trading on Tuesday, as the plane maker cut its delivery target for 787 Dreamliner planes after discovering a production defect.
The aerospace giant halted deliveries of 787 Dreamliners in May after the Federal Aviation Administration said it needed more information on the company’s planned method for inspecting the jets.
Boeing said on Tuesday that it has subsequently found “additional rework” that will be required on undelivered 787 jets. The company now expects to deliver less than half of the 787s currently in its inventory this year. Boeing’s 787 production rate will also be reduced to below five a month, while work on the problem is prioritized.
The stock was 2.1% lower in premarket trading, weighing on
Dow Jones Industrial Average
futures, which were 0.2% down, implying an 80-point loss at the open. Boeing stock is 11% up year to date, as of Monday’s close, but has fallen 11.5% from a recent peak in March.
Boeing expects the defect to take at least three weeks to address, The Wall Street Journal reported, citing people familiar with the matter. The FAA said the issue posed no immediate safety threat, the report added.
Dreamliner deliveries were initially halted in the fall for five months as the FAA investigated manufacturing flaws, before restarting in March 2021.
The newly identified problem is another blow for Boeing after the FAA recently told the plane maker its 777X jet likely won’t be approved for commercial service until mid-2023.
In more positive news for Boeing, the company resumed deliveries of the 737 MAX in May after securing regulatory approval for a fix to an electrical problem. The 737 MAX returned to service in November 2020 after being grounded for 20 months following two fatal crashes.
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