Caught In Boeing Downdraft
Caught in Boeing downdraft Sundstrand, Wyman-Gordon fall after giant's warning By Brenon Daly
ROCKFORD, Ill. (CBS.MW) -- When a giant like Boeing starts to dive, a number of other companies tend to get caught in its downdraft.
Take Sundstrand, which supplies parts to the Seattle-based giant (BA). Shares of the Rockford, Il.-based Sundstrand (SNS) skipped 6 1/8, or 11 percent, to 48 11/16 on heavy trading.
Other casualties of Boeing's warning: Lockheed Martin (LMT) dropped 1 3/4 to 104 5/8 and Wyman-Gordon (WYMN) fell 2 7/16 to 12 7/8.
PaineWebber cut its outlook on Wyman-Gordon to "attractive" from "buy", sending the stock near a 52-week low.
Like Boeing, which saw its stock drop 5 3/4 to 34 5/8, Sundstrand shares were delayed on their Big Board opening.
"It's all related to Boeing," said Eli Lustgarten, analyst at Schroder & Co. in New York City. "It's not entirely unexpected, as we have been factoring that Boeing would have a post-1999 slowdown."
Dow Jones Industrial Average component Boeing said 1998 earnings will likely be "slightly above" $1 billion and that 1999 profits will range between $1.5 billion and $1.8 billion. Previously, Boeing anticipated 1999 earnings would be $2 billion.
In addition, Boeing said it will cut up to 20,000 additional jobs by 2000. Earlier this year, the company said it planned to cut 28,000 jobs through 1999.
Lustgarten said he hadn't yet had a chance to recast his financial model for Sundstrand. But he added Boeing's slowdown makes Sundstrand's target of 15 percent annual profit growth "much, much tougher."
Sundstrand executives didn't immediately return phone calls seeking comment.