http://biz.yahoo.com/rc/040305/transport_boeing_risks_1.html
CHICAGO, March 5 (Reuters) - Boeing Capital Corp., a unit of Boeing Co. (NYSE:BA - News), said on Friday that earnings could be weakened if it decides to close its 717 jetliner program.
During the fourth quarter, Boeing lost a major 717 sales campaign, increasing the likelihood that the line may be closed, the company said in a regulatory filing.
At the end of last year, Boeing Capital's total portfolio was valued at $12.2 billion, with $9.2 billion of that in aircraft financial services.
"Program continuity is dependent on the outcome of Boeing's current sales campaigns," it said. At the end of last year, $2.2 billion of the company's portfolio was collateralized by 717s, and it received $1.5 billion from Boeing covering $2.1 billion of the portfolio.
"While we continue to believe in the utility and marketability of the B-717, we are unable to predict how an ending of B-717 production, as well as overall market conditions, would impact B-717 values and rental rates," it said.
In addition, Boeing Capital noted that in October of last year, Boeing announced it was ending production of its 757 jetliner, with the final aircraft coming off the line in late 2004.
There are more than 1,000 757s in service with about 125 operators, Boeing Capital said.
As of the end of the year, $1.4 billion of the Boeing Capital portfolio was collateralized by 757s and it received $428 million of guarantees from Boeing covering $497 million of that portion of the portfolio.
As with the 717, Boeing said it was unable to predict 757 values and rental rates and that an increase in allowances for loan losses might also result.
Boeing shares were down 30 cents at $42.33 on Friday morning on the New York Stock Exchange (News - Websites) .
CHICAGO, March 5 (Reuters) - Boeing Capital Corp., a unit of Boeing Co. (NYSE:BA - News), said on Friday that earnings could be weakened if it decides to close its 717 jetliner program.
During the fourth quarter, Boeing lost a major 717 sales campaign, increasing the likelihood that the line may be closed, the company said in a regulatory filing.
At the end of last year, Boeing Capital's total portfolio was valued at $12.2 billion, with $9.2 billion of that in aircraft financial services.
"Program continuity is dependent on the outcome of Boeing's current sales campaigns," it said. At the end of last year, $2.2 billion of the company's portfolio was collateralized by 717s, and it received $1.5 billion from Boeing covering $2.1 billion of the portfolio.
"While we continue to believe in the utility and marketability of the B-717, we are unable to predict how an ending of B-717 production, as well as overall market conditions, would impact B-717 values and rental rates," it said.
In addition, Boeing Capital noted that in October of last year, Boeing announced it was ending production of its 757 jetliner, with the final aircraft coming off the line in late 2004.
There are more than 1,000 757s in service with about 125 operators, Boeing Capital said.
As of the end of the year, $1.4 billion of the Boeing Capital portfolio was collateralized by 757s and it received $428 million of guarantees from Boeing covering $497 million of that portion of the portfolio.
As with the 717, Boeing said it was unable to predict 757 values and rental rates and that an increase in allowances for loan losses might also result.
Boeing shares were down 30 cents at $42.33 on Friday morning on the New York Stock Exchange (News - Websites) .
