Boeing resumes deliveries of 787 Dreamliners

Tuesday, May 14th, 2013 | Finance News

NEW YORK (Reuters) - Boeing Co resumed deliveries of its high-tech 787 Dreamliner on Tuesday, ending a period of nearly four months in which it was unable to provide new planes to customers because of concerns about the safety of the battery system.

The delivery marks a key turning point in the 787 crisis for Boeing, allowing the jetmaker to book revenue for completed sales of the jet, which costs $207 million at list prices.

It also will lower Boeing's profit margin, since the 787s being delivered now are relatively costly to make and were sold at steep discounts to attract customers.

However, the deliveries will start to improve Boeing's cash flow and reduce its inventory, something that investors have been anticipating as they bid up its stock.

The share price rose 1.35 percent to $96.04 in late afternoon trading on Tuesday.

Boeing said it delivered a new Dreamliner to All Nippon Airways on Tuesday, its second delivery of the year. The first was delivered before regulators on January 16 grounded the worldwide Dreamliner fleet after two lithium-ion batteries overheated and smoked that month, raising safety concerns.

Boeing also reaffirmed Tuesday that it expects to hit its target of delivering more than 60 787s this year.

Analysts say the target should be easy to hit. Boeing continued making Dreamliners while the plane was grounded, so about 25 are parked outside its factories waiting to be delivered to customers, the company said.

Boeing also has sped up production. Last week it rolled out the first 787 made at the new rate of seven per month, up from five per month previously. It aims to raise the rate to 10 per month by year-end, with the first delivery at the new rate in 2014.

(Reporting by Alwyn Scott, editing by Gary Hill)