Boeing Co. (NYSE: BA) reported second quarter EPS of $1.25 this morning, crushing the consensus estimate of $0.98. The company also beat the  revenue estimate of $16.47 billion, posting quarterly revenue of %16.54. Boeing also raised full-year EPS guidance from $3.80-$4.00 to $3.90-$4.10, still slightly less than the consensus estimate of $4.12. This is all good news for Boeing, and in pre-open trading shares are up nearly 3%.

But there are some weaknesses in the report that could crop up later this year. Boeing has lowered its guidance for commercial aircraft deliveries from 485-500 to 485-495. The lower number reflects a reduced number of 787s and 747-8s, Boeing’s newest latest models. The expected deliveries of these two models have been reduced from 25-40 units to 25-30 units. There are some who believe even that is a stretch.

In April, the Seattle Times noted that Boeing officials were saying that between a dozen and 20 787 Dreamliners would be delivered in 2011. A mechanic cited in the article put it succinctly, “It isn’t going to happen.”

The article goes on to quote several other engineers. The laundry list of problems is long:

“The assembly process is still a mess.”

“The wings on the 787s aren’t even close to being ready.”

“[Boeing] is building airplanes in the final-assembly process that then have to be rebuilt in the pick-up process, which is many times longer.”

Boeing has said that these issues have been factored into the most recent delivery schedule for the 787. That schedule has the first plane going to Japan’s All Nippon Airways by the end of September. The company may indeed meet that date, but that Dreamliner will most likely be a custom-made, hand-built, one-of-a-kind model.

If Boeing is going to deliver 25-30 of its 787s and 747-8s during 2011, then the company had better start pumping these planes out. So far in 2011, Boeing has delivered no 747s and the order book as of July 19th lists just 5 orders. A total of 35 of the 747-8s have been ordered through June of this year, but the company has not yet indicated a first delivery date.

On top of the delivery problems, Boeing has increased its employee numbers by about 4% since the beginning of the year. This will increase the company’s costs and could have a negative impact on profits in the second half of the year if the company can’t deliver its new planes.

Boeing’s shares are trading in the pre-market opening today at $72.21, within a 52-week range of $59.48-$80.65.

Paul Ausick

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