Boeing drops after trimming jet production

Boeing Co., the world's second- largest commercial-plane maker, fell in New York after saying first-quarter profit will be hurt by cuts in the production of its most profitable model because of the global recession.

Boeing dropped $2.52, or 6.4 percent, to $36.63 at 9:30 a.m. in New York Stock Exchange composite trading. The Chicago- based company's shares earlier slid as much as 7.8 percent, the biggest decline since Nov. 13.

Monthly production of the twin-aisle 777 will fall to five from seven beginning in June 2010, and plans to increase output of the new 747-8 jumbo jet and the 767 will be delayed, Boeing said in a statement on April 9. The company is keeping production steady at 31 a month for the single-aisle 737, the world's most widely flown plane.

"We think this is just the first of the cuts that Boeing will have to make to its aircraft production rates as it moves through this down cycle," Robert Stallard, an analyst with Macquarie Capital USA, said today in a research note.

Stallard, who rates the shares "neutral," said Boeing will earn $4.30 a share in 2009, less than a previous estimate of $5.11. The average estimate of 20 analysts in a Bloomberg survey is $4.90.

Boeing said it will take a charge of 38 cents a share in the first quarter because of lower output and weaker-than- projected pricing.

Boeing has been studying next year's manufacturing plans as financing for airlines has dried up, leading to deferrals and cancellations that exceeded new orders in the first quarter. The company, which said as recently as last month that it would boost deliveries to 480 to 485 aircraft this year and keep production stable through at least mid-2010, plans to give more details when it reports earnings on April 22.