Ahead of the Bell: Boeing
NEW YORK (AP) — Shares of Boeing Co. edged up Thursday before the opening bell after an analyst told investors to buy shares if they get any cheaper.
The aircraft maker's stock fell about 1 percent on Wednesday, a day the broader market fell sharply, after it announced a shake-up in its shrinking defense division. The plan includes putting some executives into new roles and reducing the number of managers. It's also disbanding its Missiles and Unmanned Airborne Systems division, spreading its work out among other Boeing units.
Boeing makes military helicopters and planes, in addition to commercial jets used by airlines. The commercial airplane business has been expanding. But the defense business is suffering because of tight government spending in the U.S. and other countries.
Sterne Agee analyst Peter Arment said that while there's still a lot of uncertainty surrounding government defense spending and other factors that play significantly into Boeing's ability to keep its defense unit strong, he says the company has been aggressively cutting costs to better match demand.
While he expects the number of military aircraft made by Boeing to fall next year, he believes the company will be able to preserve its sales margins because of its two-year preparation for a slowdown.
Shares gained 27 cents to $70.38 in premarket trading. The stock has traded between $62.12 and $77.83 in the past year.