Summary
Boeing announced its decision to end production of the 757 jetliner in late 2004, after a successful 20-year run during which over 1,000 aircraft were delivered. This strategic move is attributed to market realities and the increasing capabilities of Boeing's Next-Generation 737 family, as well as the future potential of the 7E7. The company will incur a pre-tax charge of $184 million in the third quarter of 2003, primarily for termination and shutdown costs, with most cash expenditures anticipated through 2005. This decision signals Boeing's focus on optimizing its product portfolio to meet evolving market demands and leverage its most competitive offerings. Investors should note the charge impacts near-term earnings but is presented as a necessary step to align production with market trends. Boeing will provide its third-quarter financial results on October 29th, which will include the impact of this charge.
Key Highlights
- 1Boeing will cease production of the 757 jetliner in late 2004.
- 2The decision is driven by market demand and the growing capabilities of the 737 family and future 7E7.
- 3A pre-tax charge of $184 million will be recognized in Q3 2003 for termination and shutdown costs.
- 4Most of the cash expenditures related to the charge will occur through 2005.
- 5The 757 program delivered over 1,000 aircraft to 55 customers in its 20-year history.
- 6Boeing will continue to provide fleet support for existing 757 aircraft.
- 7The company will release its third-quarter financial results on October 29, 2003.