Standard & Poor's on Friday placed its ratings on Boeing Co
The CreditWatch includes the A-plus long-term corporate credit rating on both entities. At the same time, the rating agency affirmed the A-1 short-term ratings on both entities, which are not on CreditWatch.
The CreditWatch placement follows Boeing's announcement that it will be reducing production or delaying production increases on certain widebody aircraft next year and will be taking a related charge in the first quarter of 2009, Standard & Poor's credit analyst Christopher DeNicolo wrote.
Boeing warned on Thursday that first-quarter profit would be slashed by lower-than-expected airplane prices and production cuts on its lucrative widebody planes as cash-strapped airlines deferred purchases.
The world's No. 2 plane maker, along with rival Airbus, is being hit hard as carriers and cargo operators struggle with the economic downturn. So far this year, Boeing's order book shows more cancellations than orders for jets.
Because of the drastic dip in demand, Boeing said production of its 777 minijumbo will fall to five from seven per month beginning in June 2010, and that it will delay previous plans to modestly increase production of its new 747-8 jumbo and 767 widebody models. No changes are planned for its best-selling single-aisle 737.
(Reporting by Ilaina Jonas; Editing by Steve Orlofsky)