Boeing (NYSE:BA) investors are finding it harder and harder to get a good night's sleep -- which is my clever way of saying that additional delays seem in store for the airplane maker's already-much-delayed 787 Dreamliner.
To hear Boeing tell it, multiple complications with getting the new plane airborne will not prevent deliveries beginning in Q1 2010. Such assurance may please customers like AMR (NYSE:AMR), Delta (NYSE:DAL), and Continental (NYSE:CAL), and prevent their cancelling orders as Qantas did earlier this month. It may even incline investors to sigh with relief that the worst is over.
It isn't.
According to a report just out of Broadpoint AmTech, Boeing's Q1 2010 deadline is a pipe dream. Whereas the aerospace giant believes it can rush its 787 through FAA certification in as little as eight months, Broadpoint believes the FAA will still be poking around the 787's innards a year from now. This, plus continued supply-chain difficulties (which I believe necessitated this week's purchase of subcontractor Vought Aircraft's South Carolina facility), will continue pushing back the delivery schedule.
Result: Broadpoint predicts Boeing won't see dollar one from 787 deliveries before late 2010 at the earliest -- and maybe not even by then.
Broadpoint's best-case scenario envisions no more than eight 787's delivered over the course of 2010, and perhaps three dozen more in 2011. If correct, this suggests we could see more cancellations of orders for the oft-delayed aircraft, rather than less. (Logically, this would entail consequences not just for Boeing, but for suppliers Honeywell (NYSE:HON), United Tech (NYSE:UTX), Spirit AeroSystems (NYSE:SPR), and others -- all of whom depend in part on the 787 sticking to its schedule in order that they may sell the parts needed to build it. So investors in these companies, beware.)
What's a Boeing investor to do?
In the short term, the prospect of more bad Boeing news suggests only one course of action: Sell Boeing. Longer-term, however, my Foolish colleague Rich Duprey believes that all of Boeing's missteps add up to little more than shifting 787 sales into the future. The profit potential is still there; we just have to wait a little longer to get it.
To which I respond: But what if frustrated customers don't wait? What if they cancel their 787 orders and buy Airbus planes instead?
In that case, the logical decision for long-term investors is... exactly the same: Ditch Boeing.
