Boeing said the charge would trigger a change in its 2015 earnings per share outlook due to be issued when it reports results on July 22, but gave no further details.
Boeing will take an after-tax charge of $536 million against its books for the KC-46 tanker when it announces second-quarter results next week.
This is the 2nd time that Boeing is taking a charge on this tanker which is among the biggest defense related development efforts bringing their total charges to a little over $ 800 million which is nearly $ 1.3 billion pre-taxes. Boeing said it would stick to the original schedule of delivering 18 tankers to the Air Force by August 2017 and building 179 by 2027.
The company said the after-tax charge, which is amounts to 77 cents per share, will be reflected in its second-quarter financial results.
According to Boeing, revenue and cash forecasts for the year would remain unchanged.
Its shares fell 1.4 percent in early trading on the New York Stock Exchange.
Loren Thompson, an analyst with the Virginia-based Lexington Institute, said Boeing knowingly underestimated its KC-46 development costs to prevent Airbus from winning the deal, but the losses were larger than the company initially expected.
46A aerial refueling tanker’s fuel system which the company is developing for the U.S. Air Force.
“We have a clear understanding of the work to be done, and believe strongly that the long-term financial value of the KC-46 program will reward our additional investment”, Chief Executive Officer Dennis Muilenburg said in the statement.
It said testing of non-fuel system components is 90 percent complete, and it is making progress on its overall ground and flight test program. The company forecasts an $80 billion global market for refueling aircraft.
Boeing is also a key defense contractor and won the 2011 contract beating its Airbus which is its rival from Europe.