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Boeing Restructures Space-Launch Business

Posted on: Wednesday, 23 July 2003, 06:00 CDT

ST. LOUIS (AP) - Only a week after announcing a planned second-quarter charge of $1.1 billion due to weakness in the commercial space launch market, Boeing Co. said it will realign its launch and satellite businesses to cut costs.

"The commercial space market has eroded to a point where it is no longer a driving factor in either our satellite or launch services business," Jim Albaugh, president and chief executive of St. Louis-based Boeing Integrated Defense Systems, said in a statement.

Boeing will consolidate Boeing Satellite Systems into Space and Intelligent Systems. Expendable Launch Systems, which has become primarily a supplier to the Air Force, will be aligned with Air Force Systems. Rocketdyne Power and Propulsion, builders of the Space Shuttle Main Engine and power generation systems for the International Space Station, will become part of NASA systems.

"In the commercial space segment, we've seen the market dip to historic lows and do not expect a near-term recovery," Albaugh said. "In addition, we have had performance problems in this area."

Boeing expects the realignment to have a minimal effect employment. The company will continue to report financials along its four established reporting segments.

Boeing, which is also dealing with problems in its commercial airplane unit, is scheduled to report second-quarter results Wednesday. Analysts are expecting a loss of 42 cents a share for the quarter. This compares to the earnings of 45 cents a share they were expecting before the announcement of the planned $1.1 billion pretax charge, which amounts to about 87 cents a share.

Boeing shares rose 22 cents to close at $32.57 Tuesday on the New York Stock Exchange.

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