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Monday, 29 October, 2001, 22:17 GMT
Boeing shares nosedive
Boeing may not get a slice of the cake
The aerospace giant Boeing saw a tenth of its value being shaved off by stock market traders who were concerned about its defence unit's future.
Boeing's failure on Friday to win a $200bn fighter jet contract from the US government sent the company's shares down almost $4 to $33.75. "The loss makes it harder to grow Boeing's military aircraft and missiles division longer-term," commented Deutsche Banc Alex. Brown's aerospace analyst Christopher Mecray in a research note. "[It] could theoretically put Boeing out of the fighter business, once [its] F-18 is completed," he wrote. "The loss raises long-term strategic risks," Merrill Lynch analyst Byron Callan wrote in a research note. Lockheed Martin gets wings Boeing's rival Lockheed Martin saw its shares soar during trading on Monday after winning the contract to build what could be the last manned fighter jet ever to be built in the US. But although the next generation fighter jets are expected to net the company a small fortune over the next few years, its shares closed down almost one dollar at $49. The contract is believed to be the biggest awarded by the US government yet, and Lockheed Martin seems determined to hang onto it.
Pentagon officials, meanwhile, have said that it will be up to Lockheed to decide on this. "I don't think the prospect [of Boeing getting a large subcontract] is very high," said the former head of defence procurement under the Clinton administration, Jacques Gansler. |
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