ANALYSIS-Boeing delay hurt its credibility on Wall Street

By Bill Rigby

NEW YORK, Jan 16 (Reuters) - If you want to know what's going on with Boeing Co's (BA.N) new 787 Dreamliner, ask anybody but Boeing.

The U.S. aircraft maker has consistently been late acknowledging problems with its new high-tech plane, long after industry blogs and Wall Street analysts have blown the whistle.

The company generally declines to answer specific questions about the project and the sheer inaccuracy of its projections are eroding its credibility. Boeing's problems are starting to resemble the spiraling setbacks at rival Airbus, whose A380 superjumbo was two years late, throwing parent EADS (EAD.PA) into financial disarray and ending the careers of several executives.

On Wednesday, the U.S. plane maker finally faced up to the second major delay on the revolutionary, carbon-fiber aircraft, putting it about nine months behind its original schedule.

The announcement, only a month after Boeing executives assured investors everything was on track, was widely predicted by industry watchers.

The delay forced Boeing to concede it will not build 109 787s by the end of 2009, an ambitious promise that most analysts had already lost faith in.

Wall Street is now asking why the latest assurances should be any more reliable than the last.

"Another delay, with no revised delivery schedule, and no guarantee that there will not be further push-outs," said Robert Stallard at Bank of America, in a research note. "(That) leaves Boeing investors in a difficult position."

UNRAVELING FAST

The latest delay caps a remarkable six months of unraveling for Boeing's 787 program.

A gleaming shell of the first plane was triumphantly paraded in front of 15,000 employees and customers in July 2007, amid confident forecasts the first test flight would be in August or September. Boeing now says it will not fly until at least June this year, as it grapples with unfinished work from suppliers and bolt shortages.

Wall Street is now taking a "show me" stance on the company, whose shares have plummeted since last summer.

"Boeing is likely to remain under pressure until they can hit at least one of their public milestones on the program," said Myles Walton at Oppenheimer & Co.

The company's stock performance reflects the loss of confidence. The shares are down 26 percent from their all-time high last July, before the 787 schedule started falling behind.