Alas, poor Boeing
Last month was a good one to be a Boeing shareholder. The company confirmed that its 787 Dreamliner saga, long delayed, was finally coming to a close. The plane was on track to land in Japan on July 4 for test flights with All Nippon Airways. Deliveries to airlines hither and yon would soon follow. Best of all, Boeing was still on record saying the plane would be "profitable." Now that assertion is open to question.
Late last week, Boeing began walking back from its profits promise. The reason: "financial headwinds" from production delays and potential penalty payouts. The fear is that airlines and suppliers will soon follow the lead of Spirit AeroSystems
The result: Boeing CEO Jim McNerney now says that despite developing what it at one time called the most successful airplane it ever launched, Boeing won't earn a penny of profit on the plane "for some time."
Boeing shares topped out near $80 a share last month. With the P/S now approaching the average for aerospace companies, and Boeing's profit warning putting a cap on P/E expectations, that 20% gain may be all we get out of Boeing this year.
My advice: Consider shifting your Boeing winnings to investments that still have a chance of making a buck on the 787 -- suppliers such as General Electric
Who's the biggest beneficiary of the 787 boom: GE or Boeing itself? Add both stocks to your Fool Watchlist and find out.