How Might Boeing's Weak Guidance Affect Others? (BA)

What's that in the sky? Is it a bird? Is it a plane? It could very well be a plane, but not Boeing's BA 787 Dreamliner. Boeing has provided its 2011 earnings outlook, and it is a bleaker sight than analysts expected. According to the New York Times, Boeing said that 2011 earnings would be between $3.80 and $4.00 per share, which is below the average Wall Street forecast of $4.55 per share. One of the reasons for the miss, Boeing said, is the delay of the 787 Dreamliner schedule. The Dreamliner was originally slated for the first quarter; now the company expects to launch in the third quarter. Boeing also attributes the miss to higher pension costs. As Boeing tries to increase its revenue stream, it also faces fierce competition from Airbus. The New York Times reports that Airbus sold 644 planes in 2010 – 19 more than its U.S. rival. For the past eight years, Airbus has also delivered more planes than Boeing. Assuming that Boeing's outlook remains and that Dreamliners are not delivered, there are a few corporations that could feel the pain of Boeing's earnings outlook: GE GE – GE makes the GEnx engine, one of the engines selected for Boeing's 787 Dreamliner. Delivery of Dreamliners has consistently been pushed back, which may make potential buyers leery. Honeywell HON – According to Honeywell, the company “provides multiple products to the B787 aircraft, including flight control electronics, navigation radios, crew information system and interior and exterior lighting." Donaldson DCI – Donaldson provides air purification systems for the Dreamliner. It is still early, and Boeing does have time to rebound, but it will be interesting to see if the Dreamliner's maker can sort out its pension cost issues. Also, with delays occurring again on the Dreamliner, it is impossible to say when it will make its first commercial flight.