UPDATE 2-Boeing to boost 777 output but 787 pressure seen

*Global demand buoys 777 outlook

*Report on 787 seen pressuring stock

*Shares off 2.9 pct
(Adds analyst, company comment, shares)

ATLANTA, Dec 20 (BestGrowthStock) – Shares of Dow component Boeing
Co (BA.N: ) slumped almost 3 percent on Monday, and at least one
market watcher cited a published report that said a delivery
delay of possibly six months or more could be announced for its
787 Dreamliner aircraft.

The plane maker also said it will increase its 777
production rate based on strong global demand, the second
output boost for that program announced this year.

Boeing is studying the delivery schedule for the 787 and
making design changes to the carbon-composite aircraft
following a fire aboard a test flight last month that led to
the grounding of the 787 test fleet.

A weekend Seattle Times report said a delivery delay for
the 787 could be announced by Christmas and cited other
manufacturing problems. The report, which quoted people who
work on the plane and were given anonymity, also said the U.S.
Federal Aviation Administration has raised the possibility with
Boeing that the 787 might not obtain certification for
long-distance flights between continents.

“They may delay the 787 by more than six months; (that) was
a story in the Seattle Times,” Stephen Massocca, managing
director at Wedbush Morgan in San Francisco, said on Monday.

Wedbush Securities analyst Kenneth Herbert said in a note
to clients on Monday that while the 777 output increase showed
the strength of the global aerospace market, “the near-term 787
issues will continue to drive sentiment on Boeing stock.”


Boeing said in a statement on Monday that it was working on
a solution that would permit 787 test flights to resume.

“We’re working a revised program schedule that will
accommodate the known issues and discoveries on the program —
including the work backlog that exists in the factory — as
well as the remainder of flight test and certification,” Yvonne
Leach with Boeing 787 Program Communications said in an email.
“We expect to finalize it in the coming weeks.”

Leach said the Seattle Times article overall was “valid in
its assessment of the challenges” the 787 program faced.

“We have always acknowledged that new airplane programs are
difficult and that bringing innovation to the market takes hard
work,” she added.

Shares of Boeing have fallen more than 8 percent since the
fire incident that led it to halt 787 test flights. They were
down $1.87 to $63.16 in afternoon trading.

Also on Monday, Boeing said production of the wide-body 777
would rise to 8.3 per month in the first quarter of 2013. In
March, the company had announced it would boost output to seven
planes from five a month starting in mid-2011.

Boeing and EADS (EAD.PA: ) unit Airbus suffered a slump in
orders in 2008 and 2009 amid the recession. Now, demand is
resuming as air traffic trends recover.
(Reporting by Karen Jacobs, with additional reporting by Chuck
Mikolajczak and Lynn Adler in New York, editing by Gerald E.

UPDATE 2-Boeing to boost 777 output but 787 pressure seen