Boeing (NYSE:BA), said on Wednesday it would deliver fewer planes in 2016 and forecast earnings below expectations, sending shares tumbling as much as 10 percent to a 52-week low.
Boeing expects to deliver 740 to 745 planes in 2016, its centenary year, down from a record 762 in 2015. It will build fewer 737s as it shifts that factory to the upgraded 737 MAX. It also is cutting 747-8 output in response to weak demand.
Boeing forecast 2016 core earnings, excluding some pension and other costs, between $8.15 and $8.35 per share, below the average analyst estimate of $9.43, according to Thomson Reuters I/B/E/S.
Its forecast for about $10 billion in operating cash flow in 2016 raised concern among analysts.
"Whilst we don't expect this to negatively impact Boeing's existing plans to return cash to shareholders, it could create doubt as to the sustainability of these plans," RBC analyst Robert Stallard wrote in a note.
He added that Boeing still faced a likely cut to 777 production as it begins building the successor 777X in 2017. He also cited the risk of an "impact from an aerospace downturn if this should occur at some point before the end of this decade."
Others on Wall Street, however, saw the results and forecast as solid. "We are buyers of Boeing on the weak headline EPS number," said Peter Arment, an analyst at Sterne Agee CRT.
Boeing's net income fell to $1.03 billion, or $1.51 per share, in the fourth quarter, from $1.47 billion, or $2.02 per share, a year earlier.
Core earnings declined to $1.60 per share from $2.31, reflecting a charge for slowing production of the 747-8 jumbo jet. Wall Street looked for core earnings of $1.26 per share, according to Thomson Reuters I/B/E/S.
Both figures reflected the aftertax charge of $569 million, or 84 cents a share, for cutting 747-8 output to six planes a year from 12, starting in September 2016.
Fourth-quarter revenue fell about 4 percent to $23.57 billion. Analysts expected $23.53 billion, according to Thomson Reuters I/B/E/S.