Broadband exit hits Boeing profit

Boeing says it has passed key production milestones for the 787

Boeing has suffered a slump in quarterly profits, due mainly to the cost of terminating its unsuccessful in-flight broadband service.

Boeing decided to scrap the Connexion high-speed service earlier this year after lukewarm interest from airlines.

The move cost Boeing $280m (£149m) in the third quarter, leading to a 31% fall in profits to $694m in the period.

But Boeing said its core business was strong, with deliveries set to rise in 2007 and 2008 and record orders.

Dreamliner schedule

It has now taken 432 orders for its new 787 plane - known as the Dreamliner - and reiterated that it expected to deliver the plane on schedule in 2008.

The firm has staked much of its future on the success of the 787 and has been competing fiercely for orders with rival Airbus' A350 aircraft.

In contrast, Airbus has suffered a string of delays to its flagship A380 superjumbo and will not fulfil its first order until the end of 2007 - a year behind schedule.

We aim to achieve a new level of consistently strong financial performance Jim McNerney, Boeing chief executive. See Boeing shares

Boeing delivered 100 planes during the quarter, up from 62 in the equivalent period last year, and expects to fulfil 395 orders this year.

Deliveries are expected to increase to between 440 and 445 next year and to rise again in 2008.

Boeing's order book is currently worth $229bn, 12% higher than at the same time last year.

Despite the costly exit from Connexion, Boeing said its core civil and military aviation businesses were performing strongly.

"As we continue to drive our growth and productivity efforts, we aim to achieve a new level of consistently strong financial performance," said Jim McNerney, Boeing's chief executive.

Boeing shares fell 3.2% on market worries about its 2007 outlook.