7/25/09 Boeing 777 needs Mod

Post #20 Intellivest Securities Research, Inc. Not Advertising or a Research Report


During the run portion of this morning's triathlon, my mind started focusing on BA Boeing's recent challenges and specifically the 5 announced delays on the Dreamliner project. BA closed Friday at $42.37 up 0.42. Then I see the print news reports on Federal regulators proposing to require modifications to some Boeing 777 engines to prevent ice from forming in fuel gauges during long flights. I think this is good news for James W. McNerney, Jr. and his team because it causes people to focus on airline safety from a regulatory perspective. (Obviously, it is bad news in terms of having to deal with the immediate issues.) Imagine - if subtle defects don't emerge until after thousands of engine cycles, how many of these hidden traps escape being uncovered in the development stage because of pressure to meet deadlines due to economic consequences in the marketplace in which BA competes and the stock market? I am sure that if you examine every public statement of James W. McNerney, Jr. and his colleagues there is always a safety or other operational qualifier regarding development timetables. Unfortunately these qualifiers seem to be ignored by everyone.

What an exciting two weeks it has been for the Dow 30 with more to come. I guess my happiest moment was for CAT Caterpillar which as Barron's 7/27/09 p6 says they "got a nice whirl and sent off bullish vibes" with 2Q profits per share at 0.60 compared with $1.14 same period last year despite a 41% drop in revenue. CAT closed 42.00 on Friday up 0.74.

The big news on a Dow 30 company today is that MSFT Microsoft agreed to give Euorpean users of is Windows software a choice of Web browers. Per WSJ today @B1 this move goes beond what US regulators got when they sued MSF 15 years ago and is in response to European antitrust regulators. This will help Google among others.