Boeing earnings hit by problems over tankers

[CHICAGO] Boeing said on Wednesday that it took US$425 million in pre-tax charges against its second- quarter earnings over problems with the wiring in the refuelling tankers it is developing for the Air Force.

Boeing beat its rival Airbus for the hotly contested tanker contract in 2011 by bidding so low that it did not expect to earn a profit until it was well into full production.

While Boeing executives said that the wiring problems were under control, investors were concerned about the potential for greater problems on the tanker contract, which could be worth up to US$50 billion. That helped drive down Boeing's stock on Wednesday by 2.3 per cent to US$126.71 a share.