Standard & Poor's said Friday it had placed the credit rating on Boeing and its finance subsidiary on watch for possible downgrade as the US aerospace giant moved to cut production that could hit earnings.
US aerospace giant Boeing Thursday said it would slash production of its twin-aisle 777 aircraft and also delay plans to "modestly" increase production of its new 747-8 jumbo planes and 767 aircraft.
Standard & Poor's Ratings Services said in a statement that it placed its ratings on Boeing and Boeing Capital, including the A+ long-term corporate credit rating, on watch "with negative implications."
At the same time, it affirmed the A-1 short-term ratings on both entities.
The action "follows Boeing's announcement that it will be reducing production or delaying production increases on certain widebody aircraft next year and will be taking a related charge in the first quarter of 2009," said Standard & Poor's credit analyst Christopher DeNicolo.
Boeing had emphasized that the production rate adjustments on the three aircraft models "solely reflect delivery deferrals requested by customers in response to unprecedented declines in global passenger and air-cargo volumes."
The production decisions and the price declines will hit first-quarter 2009 net profit, the company said, projecting a reduction of 38 percent per share.
At the beginning of the year, the US aerospace giant predicted 2009 earning per share between 5.05 dollars and 5.35 dollars.
Boeing said it would give updated full year earnings guidance when it reports first-quarter financial results on April 22.
Boeing in January reported a 56-million-dollar loss in the 2008 fourth quarter and said it would slash 10,000 jobs this year due to the uncertain outlook.
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