Bloomberg News reports that Boeing Co. (NYSE: BA) has a whole lot of losing going on. Yesterday, Boeing suffered its fourth straight defeat in three months on a U.S. defense contract. This loss represents $41 billion in lost revenue.

Here are the four contracts:

• Yesterday. Lockheed Martin (NYSE: LMT) the world's largest defense company, beat Boeing for a $1.46 billion U.S. Air Force award to build a new network of navigation satellites for military and civilian use. The Air Force said it reviewed five years of past performance for both contractors. Boeing has yet to launch a single satellite under its most recent GPS contract from April 1996, and in 2006 the company forfeited $21.4 million and replaced the program's managers after delays and cost overruns.
• February 2008. EADS, parent of Airbus and Northrop Grumman (NYSE: NOC) won a $35 billion tanker contest for the Air Force. I've spilled much electronic ink on this one -- it looks like the Air Force changed the specifications for the project but only told EADS about the change.

• April 2008. Northrop won a $3.74 billion Navy unmanned spyplane order against Boeing. Bloomberg News reports that Captain Robert Dishman, the U.S. Navy's program manager, said at the Pentagon in Washington that Northrop's Global Hawk is "a highly capable air vehicle."
• March 2008. Lockheed beat Boeing for a $766 million radio contract.

What is going on here? There is a different reason for each of Boeing's losses. Clearly the CEO cannot get heavily involved in the details of each bid. So,he needs to appoint people who can take charge of the programs and create a way to follow up on what they're doing so if there's a problem that requires his attention, he can do something to fix it. Unfortunately, it's too late for Boeing on these four programs except the Tanker one which is still under review.

The Seattle Times speculates that there are two Boeings: the Defense and the Commercial. The Defense is clearly having problems winning bids. But the Commercial, while winning many new orders, is struggling to deliver its 787 after numerous delays. There are no easy answers to Boeing's problems. But I believe Boeing's CEO is determined to solve them. Whether or not he succeeds remains to be seen.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He is writing a book about Boeing and has no financial interest in the securities mentioned.

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MAJOR PAPERS:

• According to people familiar with American International Group Inc's (NYSE: AIG) board, some directors feel that another big loss in the current quarter could prompt them to re-evaluate their support for CEO Martin Sullivan. The sources said a decision on Sullivan's fate isn't likely to be made until the company sees results over the next several months, the Wall Street Journal reported.
• The Financial Times reported that Kohlberg Kravis Roberts, The Blackstone Group LP (NYSE: BX) and Apax Partners are among the private equity groups that have been blocked from bidding int he first round of the GBP7B auction of The Royal Bank of Scotland Group Plc's (NYSE: RBS) insurance business.

• The Boeing Company (NYSE: BA) closed a helicopter production line for several hours yesterday due to possible irregularities found in two military helicopters, the Seattle Times reported. The company did not disclose exactly why it shut down the production of the H-47 Chinooks.

• According to Mac Rumors, citing French LeMatin.ch, a source in Swisscom AG (OTC: SCMWY) said Switzerland will be getting the iPhone device from Apple Inc (NASDAQ: AAPL) this summer, and it will feature GPS, Video Conferencing and Mobile TV.

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Airbus now expects to deliver 12 A380 planes in 2008, down from 13, and 21 planes in 2009, down from 25, the company announced Tuesday.

Promoted as the world's most economical, large aircraft, the A380 is about two years behind schedule. The A380 will seat 525 passengers in a normal configuration, at least 50-120 seats more than its chief competition, Boeing's (NYSE: BA) 747, the wide-body industry standard.

In Europe, shares of Airbus's parent EADS were virtually unchanged on the news, down just 2 euro cents to 12.72 euros in afternoon trading. Boeing's shares gained five cents to $84.87.

Impact on orders

Airbus' Chief Salesman John Leahy told The Associated Press Tuesday he doesn't expect today's delay to create additional order cancellations for the A380. Independent stock analyst C. Leonard Bauer isn't so sure.

"Trans-ocean carriers, like Japan's All Nippon Airways, will be patient because the A380 is an integral part of their long-route strategy and because long hauls comprise a high percentage of their routes," Bauer said. "But other airlines, such as [Middle East airline] Emirates may begin to grow impatient." Bauer added that he doesn't have a rating on nor own shares of Boeing or Airbus.

Further, the A380 is critical to Airbus' business model because the company does not have a formidable contender in the next-generation, point-to-point market, Bauer said. Airbus's point-to-point aircraft, the currently under design A350, will compete with Boeing's 787 Dreamliner, also currently under design, but the Dreamliner will secure the majority of new orders in the category, in Bauer's interpretation.

"If the A380 doesn't achieve its sales goals, Airbus will trail Boeing in the two major, next-generation commercial airliner categories, trans-ocean and point-to-point, which is not a prescription for success," Bauer said. "For Airbus to grow at a good rate the A380 must succeed in grabbing market share from the 747."

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MAJOR PAPERS:

• Lockheed Martin Corporation (NYSE: LMT) is expected to beat out The Boeing Company (NYSE: BA) for an approximate $1.8B contract to from the U.S. Air Force to build a new generation of navigation satellites, the Wall Street Journal reported.
• According to the Wall Street Journal, former American International Group Inc (NYSE: AIG) CEO Maurice R. "Hank" Greenberg is pressing the troubled insurer to turn the company around. He says that he and other major shareholders have "deep concern about the persistent and seemingly endless destruction of value at AIG."
• Hybrid Capital Second, a Morgan Stanley (NYSE: MS) investment vehicle, increased its stake in internet start-up Livedoor to 18.15% from 12.76% in March, the Financial Times reported, superseding the company's founder, Takafumi Horie.

• After it incurred $3.2B of bad debts in the first three months of the year, the Telegraph reported that Knight Vinke, an HSBC Holdings Plc (NYSE: HBC) shareholder, has renewed calls for the bank to shed its U.S. consumer finance business.

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Several leading business journals have reported that China has created its own regional jumbo jet company to compete with Boeing Co (NYSE: BA) and Airbus.

The Financial Times (subscription required) reports, "China has unveiled a state-owned aircraft manufacturer intended to eventually challenge Boeing and Airbus's control of the global market in large airliners." The Times characterizes the Commercial Aircraft Corporation of China (CACC) as "a significant step in Beijing's drive to create an advanced civil aviation manufacturing sector able to help meet the country's rapidly growing demand for regional and larger jets."

Reuters noted that, "many analysts have expressed skepticism about the commercial prospects of a large jet designed and manufactured entirely in China, given the country's limited experience in big aircraft." Not sure what analysts know, I'm skeptical just as much of them.

According to Bloomberg, "China aims to build a 150-seat aircraft by 2020 to support the expansion of its domestic travel market and to compete with Boeing and Airbus overseas." In terms of expansion, the country plans "to triple its fleet of passenger and cargo planes to 4,000 by 2020 as economic growth lifts travel demand in the world's second-largest aviation market, according to the General Administration of Civil Aviation."

It should be of no surprise to anyone that China would pursue the expansion of its aviation industry. While some may scoff at China's current technological capability, it would be an error to underestimate the ability of a focused and well-financed competitor. In terms of the time frame for this fledgling industry that too is not truly relevant -- it is not a race and whatever they develop, and whenever they develop it -- it will be more than they have now. They have the market size and they will gain market share.

They are also likely to gain from reverse engineering of Boeing and Airbus designs, saving R & D money all along the way. This story will be playing out over decades.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.He writes the columns Chasing Value and Serious Money.

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Today's Washington Post reports on the latest successful purchase of John McCain's services -- yielding a sweet real estate deal for an Arizona developer in the wake of his $100,000 campaign contribution. But that railer against the role of money in politics appears to have been bought many times before -- and American workers and taxpayers have paid the price.

The Washington Post reports that McCain pushed legislation that let an Arizona rancher trade remote grassland and ponderosa pine forest there for acres of valuable federally owned property that is ready for development, a land swap that now stands to directly benefit one of his top presidential campaign fundraisers. Specifically, Steven A. Betts, who raised $100,000 for McCain, got the job of developing rancher Fred Ruskin's land after McCain's legislation helped Ruskin pick it up at below market rates.

But this is at least the fifth transaction where a campaign contributor has benefited from McCain's power. Here are five others:

• $100 billion U.S. Air Force contract to European company, EADS. In March 2008, McCain used his position on the Senate Armed Services Committee to help EADS, parent of Airbus, a former client of his national finance chairman, win a $100 billion Air Force contract against Boeing Inc. (NYSE: BA) after receiving $14,000 in donations from EADS employees.
• Del Webb land deal. In 1994, McCain helped a lobbyist for land developer Del Webb Corp. pursue an exchange in the Las Vegas area.
• Diamond land deal. In 1991 and 1994, McCain sponsored two bills sought by donor Donald R. Diamond that yielded the developer thousands of acres in trade for national parkland.
• Lindner land deal. In the late 1990s, McCain promoted a deal in Arizona's Tonto National Forest involving property part-owned by Great American Life Insurance, a company run by billionaire Carl H. Lindner Jr., a big contributor to national political parties and presidential candidates.
• $3.4 billion Keating S&L bailout. In the 1980s, he intervened to keep regulators away from Charles Keating, a Savings & Loan operator, who contributed to McCain's campaign and let McCain's wife co-invest in a real estate deal. Keating's Lincoln Savings and Loan ultimately failed, costing taxpayers $3.4 billion.

I think it may be worth investigating whether there are any documents that connect the McCain campaign donations to these favorable business outcomes for the donors. Otherwise, they might just be coincidences.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He is working on a book about Boeing and has no financial interest in the securities mentioned.

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The Boeing (NYSE: BA) 787 Dreamliner has been delayed three times, mostly because of problems with suppliers.The situation has gotten so bad that some of the company's customers, large airlines, say they will ask Boeing for compensation. That could cost Boeing a lot of money.

Boeing management has promised that there will be no more delays and that everyone who wants a plane will get one, on time. But, the best laid plans...

The company's large unions may stage work slowdowns. They argue that the work given to suppliers should have gone to them. They claim that delays could have been cut. Of course, now they want to delay the program further all on their own.

"Unions have the upper hand now,'' said Richard Aboulafia, an analyst with Teal Group, an aviation consulting firm in Fairfax, Virginia, told Bloomberg. "They're determined to get their share of the good times."

Boeing management now faces more criticism because its own labor force can't be held in line. The company's stock has already dropped due to the delays. First suppliers, now its own people.

The news shows that incompetent management usually stays incompetent. Boeing did not control its supply chain, and did not know it had component problems until too late. Now it will be accused of not even keeping tabs on its own unions.

Douglas A. McIntyre is an editor at 247wallst.com.

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Reuters reports that German daily Die Welt quotes a customer letter saying that Boeing Co. (NYSE: BA) just announced the fourth delay in delivering its 787 Dreamliner. It was originally scheduled for this month but if Die Welt is right about the fourth delay -- which would affect deliveries scheduled for 2012 -- the 787 would now be 27 months behind schedule. But Boeing denies the report.

The good news as of now is that none of the 55 customers who ordered 787s -- creating a $151 billion backlog -- have canceled. Last month the CourierPost reported that the three initial delays would cost Boeing $4 billion cancellation fees. No word on how much this fourth delay will add to that cost -- if the report proves to be true.

But 2008 is turning out to be far worse year for aircraft orders than 2007 was. Both Boeing and Airbus have played down expectations for plane orders this year, after the record 2,754 orders between them last year. Most analysts are expecting about half that number this year.

However, Boeing denies the report of the fourth delay. According to Yvonne Leach, a spokeswoman in Seattle, "There has been no change since our announcement in April." She added that, on average, delays would put deliveries about 20 months behind.

Is Leach right? We'll find out someday. Meanwhile, Boeing CEO James McNerney can't be happy about this latest report. I hope for Boeing's sake that it's the last.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He is writing a book about Boeing and has no financial interest in its securities.

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• Apple Inc. (NASDAQ: AAPL) - the technology giant had a pretty good past year and I think it is a great pick;
• Boeing Co. (NYSE: BA) - the aerospace company had to face declining stock price during 2007, but has been seeing a nice rebound recently. With the soaring oil prices though I'm note quite sure that I will be eager to invest my money in BA;
• CVS Caremark Corp. (NYSE: CVS) - the largest U.S. pharmaceutical retail chain saw its shares in a steady ascent but still trades at a modest valuation;
• Genentech Inc. (NYSE: DNA)- the biotechnology company faced tough times that weighed heavily on its shares for the past year;
• JPMorgan Chase & Co. (NYSE: JPM) - the financial company has been under pressure from traders' recession fears over the past months but Marcial sees earnings potential for the stock;
• Petroleo Brasileiro (NYSE: PBR) - is one of the world's largest oil companies; I believe is a good pick as oil prices are poised for further more gains;
• Pfizer Inc. (NYSE: PFE) - the drug company saw its shares plunging for the past year, but with its current plans related to some significant acquisition we may see a nice recovery in the stock.

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Teledyne Technologies (NYSE: TDY) manufactures sophisticated electronic components, instruments and communications products. These include defense electronics, data acquisition and communications equipment for airlines and business aircraft; monitoring and control instruments for industrial and environmental applications; and subsystems for wireless and satellite communications. The firm also provides systems engineering and information technology services for defense and space applications; manufactures general aviation and missile engines; and makes on-site gas and power generation systems. Clients include Boeing (NYSE: BA), NASA and the U.S. Air Force. Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC) and Raytheon (NYSE: RTN) are competitors.

The company pleased investors last week, when it announced Q1 EPS of 77 cents and revenues of $451.8 million. Analysts had been looking for 66 cents and $424.6 million. The CEO noted that it was the twenty-fifth consecutive quarter of year-over-year earnings growth. Management also guided Q2 EPS to 72-74 cents (74 cent consensus) and FY08 EPS to $2.98-$3.06 ($2.93 consensus).

TDY shares popped on the news and are now forming a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the shares with two "strong buys", three "buys" and one "underperform". Analysts see a 15% average annual growth rate, through the next five years. The TDY P/E ratio (19.67), Price to Sales ratio (1.20), Price to Book ratio (3.59), Price to Cash Flow ratio (14.13), Sales Growth rate (17.17%) and EPS Growth rate (35.09%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 86% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $42.86 and $59.18. A stop-loss of $50.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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Here are some highlights from this past week's earnings coverage from BloggingStocks:

• American Axle & Manufacturing Holdings Inc. (NYSE: AXL) reported a strike-related Q1 loss.
• Arch Coal Inc. (NYSE: ACI) Q1 profit tripled on increased demand and higher prices.
• Boeing Co. (NYSE: BA) posted better-than-expected earnings despite Dreamliner delays.
• Coach Inc. (NYSE: COH) better-than-expected quarter didn't impress Jim Cramer.
• ConocoPhillips (NYSE: COP) reported Q1 earnings and revenue above analysts' forecasts.
• Delta Air Lines Inc. (NYSE: DAL) reported a big loss on a one-time charge and fuel costs.
• Dow Chemical Co. (NYSE: DOW) posted a smaller-than-forecast profit drop and predicted a good Q2.
• EI DuPont de Nemours & Co. (NYSE: DD) Q1 earnings rose 26% but missed expectations.
• Ford Motor Co. (NYSE: F) surprised Wall Street by swinging to a profit in the first quarter.
• Goodyear Tire and Rubber Co. (NYSE: GT) easily surpassed analyst estimates for the first quarter.
• Halliburton Co. (NYSE: HAL) Q1 earnings and revenue rose due to international growth.
• Hershey Co. (NYSE: HSY) profit fell but was in line with analysts' expectations.

• JetBlue Airways Corp. (NASDAQ: JBLU) reported a narrower-than-expected loss in the first quarter.
• Lockheed-Martin Corp. (NYSE: LMT) posted solid Q1 results and raised its full-year outlook.
• McDonald's Corp. (NYSE: MCD) easily beat Q1 estimates due to gains overseas.
• Northwest Airlines Corp. (NYSE: NWA) reported a larger-than-expected loss due to fuel costs.
• PepsiCo Inc. (NYSE: PEP) posted solid Q1 results that were merely inline with expectations.
• Pepsi Bottling Group (NYSE: PBG) earnings were flat, but beat Wall Street expectations by a penny.
• Potash Corp. of Saskatchewan Inc. (NYSE: POT) posted strong results on strong demand and price hikes.
• Sonoco Products Co. (NYSE: SON) reported better-than-expected Q1 results and revised guidance.
• Starbucks Corp. (NASDAQ: SBUX) preliminary Q2 results were lower than analyst's expected.
• 3M Co. (NYSE: MMM) beat earnings expectations and reaffirmed its guidance.
• UAL Corp. (NASDAQ: UAUA) posted a worse-than-expected Q1 loss on rising fuel prices.
• US Steel Corp. (NYSE: X) better-than-expected quarter didn't impress Jim Cramer.
• Yum! Brands Inc. (NYSE: YUM) Q1 profits soared on overseas strength, and raised its guidance.

Also, Jim Cramer discusses "crummy lenders" and Jonathan Berr wonders if Ford's turnaround is for real. Joseph Lazzaro considers Citigroup Inc. (NYSE: C) as a barometer of the economy. One analyst thinks financials may have hit bottom and it may be time to buy, and Jon Ogg looks at what short sellers are making of tech stocks. Ted Allrich discusses what to sell/what to buy.

Upcoming results to watch for include Verizon Communications (NYSE: VZ), Tyson Foods (NYSE: TSN), CBS Corp. (NYSE: CBS), Countrywide Financial (NYSE: CFC), U.S. Steel Corp. (NYSE: X), Office Depot (NYSE: ODP), General Motors (NYSE: GM), Procter & Gamble (NYSE: PG), Kraft Foods (NYSE: KFT), Starbucks (NASDAQ: SBUX), Time Warner (NYSE: TWX), Comcast (NASDAQ: CMCSA), Exxon Mobil (NYSE: XOM), and Chevron (NYSE: CVX).

Visit AOL Money & Finance for more earnings coverage.

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Hexcel Corporation (NYSE: HXL) is a leading advanced structural materials company. It develops, manufactures and markets lightweight, high-performance materials, including carbon fibers, reinforcements, prepregs, honeycomb, matrix systems, adhesives and composite structures. The firm's materials are found in such diverse products as aircraft components, bullet-resistant vests, auto parts, golf clubs, window blinds and printed circuit boards. Customers include General Electric (NYSE: GE), Raytheon (NYSE: RTN) and Boeing (NYSE: BA). BP plc (NYSE: BP) is a major competitor.

The company surprised the Street earlier in the week, when it reported Q1 EPS of 23 cents and revenues of $344.5 million. Analysts had been expecting 20 cents and $314.1 million. The CEO noted that sales for commercial aerospace were up sharply, across the board. Management also guided FY08 EPS to the high end of the range 90-95 cents (93 cent consensus).

HXL shares popped above 50-day, 90-day and 200-day moving average resistance on the news and then passed into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with one "strong buy", four "buys" and three "holds". Analysts see a 25% growth rate, through the next year. The HXL PEG ratio (1.04), Price to Sales ratio (1.84), Sales Growth rate (21.90%) and EPS Growth rate (35.29%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 95% of the outstanding shares. Over the past 52 weeks, the stock has traded between $17.00 and $27.91. A stop-loss of $19.25 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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• Ambac Swings to Worse-Than-Expected Loss
• Cramer: Higher Oil Is a Good Thing

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Despite excellent earnings from Boeing Co. (NYSE: BA) yesterday, a bit of a shadow still hangs over the company. That's because in February the Air Force awarded a $100 billion contract for in-flight refueling craft -- known as tankers -- to EADS's Airbus and Northrop Grumman (NYSE: NOC). Boeing is currently challenging this award. But an interview I did for my book on Boeing suggests that Boeing will not win this contract because George W. Bush and John McCain want to award the contract to Bush's new friends: France's Nicolas Sarkozy and Germany's Angela Merkel.

I got this theory from a veteran Wall Street analyst who covers the aircraft industry. He suggested that Boeing lost the Tanker bid because John McCain -- who is ranking member on the Senate Armed Services Committee -- had the Air Force change the specifications for the tanker bid so Airbus and Northrop would be able to field a competitive bid. My source noted that the one problem with the change was that the Air Force did not inform Boeing about it.

After the bid was awarded to Airbus, it became clear that the original specifications had changed from a small, 767-sized craft to a medium-sized 777 one. During the review process, my source contends that Boeing asked the Air Force if the 767-sized craft was what it wanted. Boeing also told the Air Force that it would be happy to bid with a different model if the Air Force wanted. But the Air Force told Boeing that it still wanted the 767-sized craft.

My source also pointed out -- as I posted last month -- that McCain's top finance staff members for his presidential run were lobbyists for Airbus. But my source mentioned that Airbus paid them hundreds of thousands of dollars a year. He also suggested that President Bush got involved in the decision. My source thinks that Bush awarded the contract to Airbus because he wanted to curry favor with Sarkozy and Merkel -- both countries are part of Airbus.

My source believes that the Air Force will not split this contract between two vendors and that Boeing will not win its appeal of the award. He said that the impact of the lost contract is not likely to be significant over the next five years. The tanker would have added "only" $1 billion a year for the next five years and then $2.5 billion to $3 billion in the early 2010s.

But here's the good news. He thinks that Boeing will deliver the 787 Dreamliner in the fourth quarter of 2009 and that starting then it will begin to show annual earnings per share growth of 25% to 30%. This is a big step up in growth which he attributes to Boeing's $346 billion backlog. And without the 787 delays, which he thinks will cost Boeing $3 billion in penalty payments, Boeing's 2009 earnings guidance would have been 20% higher.

Since Boeing trades at a relatively low P/E of 15.6, this analyst thinks the stock is a bargain. Even Bush and McCain can't keep a good company down.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He is writing a book about Boeing and has no financial interest in the securities mentioned.

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