Update Boeing (BA)

01/20/2011 1:40 pm EST


Jim Jubak

Founder and Editor, JubakPicks.com

Amazing how bad news can become good news when it confirms the market’s opinion.

Pretty much everybody short of Amelia Earhart knew that aircraft maker Boeing (BA) would delay the 787 Dreamliner’s entry into service until the third quarter of 2011.

Having an electrical fire force an emergency landing during a November 9 test flight does tend to delay things.

But nonetheless the actual official announcement of the delay on January  18 sent the stock up 3.1%. I guess though everyone know the plane would be delayed into the third quarter, some fear remained that the reality would still be worse.

The company said that it had been gradually returning test planes to the flight test program after extensive ground testing. Boeing has even, it said in the announcement, restored some buffer time to the schedule.

None of this means that Boeing is out of the woods yet. The company said that the new delivery date is not expected to have a material impact on 2010 financial results. That’s last year, right? All that means is that Boeing isn’t going to get socked with big penalties for late delivery from its airline customers in 2010. Doesn’t say anything about penalties in 2011.

For that, and more details on the initial 787 deliveries, investors will have to wait for the company’s earnings conference call on January 26.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund, may or may not now own positions in any stock mentioned in this post. The fund did own shares of Boeing as of the end of November. For a full list of the stocks in the fund as of the end of November see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/. I will publish the fund’s holdings as of the end of December tomorrow January 21.

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