Plane suppliers shrug off latest Boeing 787 delay

ATLANTA (Reuters) - Shares of many aircraft suppliers gained on Friday in concert with the broader market, shrugging off news of another delay in Boeing Co's (BA.N) Dreamliner 787 program.

The world's No. 2 plane maker behind Airbus said delivery of its first 787 was now expected in mid-first-quarter 2011. Boeing had said this summer that the delivery might slip into early 2011 from the fourth quarter of 2010.

Spirit AeroSystems Holdings (SPR.N), which provides the nose for the aircraft, said it has been told to adhere to its current production schedule.

"What Boeing has told us is that it's crucial for us to keep working to the current production schedules, so there's really no change for us," Spirit AeroSystems spokesman Ken Evans said on Friday. "We remain a firm believer in the airplane."

While the delay may have been unwelcome news for parts makers, analysts said there would likely not be any significant near-term material financial impact.

Rockwell Collins Inc (COL.N) spokeswoman Pam Tvrdy said the delay would have "minimal" impact on production and "no financial impact" for the supplier of cockpit systems.

"It impacts Boeing from the aspect of their reputation because this is the sixth time they have made this delay," said Paul Nisbet of JSA Research. "And it's embarrassing to say the least."

Alex Hamilton, managing director at boutique investment firm EarlyBirdCapital, said the delivery delay further pushes back the payoff that suppliers will see once production of the carbon-composite 787 fully ramps up.

Still, he added that rising production rates for other plane models and improved air traffic trends generally bode well for parts makers.

"Despite 787, most of these suppliers are going to do well because we're in the early stages of a recovery," Hamilton said.

The widebody, fuel-efficient 787 aircraft, already more than two years behind its original schedule, has been plagued by repeated production delays and a 2008 machinists strike.

Among big U.S. airlines with orders for the 787, Continental Airlines Inc CAL.N called the delay a disappointment but said it was still committed to the program and hasn't gotten a revision to its delivery schedule.

Continental, which plans to merge with United parent UAL Corp UAUA.O and become the world's largest carrier, has 25 Dreamliner planes on order it expects in the second half of next year. UAL also has orders for 25 Dreamliners.

Boeing shares were up 2.6 percent, Continental shares rose 1.9 percent and UAL added 2.1 percent.

Among supplier shares, Spirit AeroSystems gained 3.5 percent to $19.68 in early afternoon trading on Friday as global stocks rose. Wheel and brake maker Goodrich Corp (GR.N) was up .8 percent to $70.23, Rockwell Collins rose 2.5 percent and Triumph Group (TGI.N), which supplies composite ducts and fittings to the Dreamliner, was up 2.1 percent.

(Reporting by Karen Jacobs, with added reporting by A.Ananthalakshmi in Bangalore, Deepa Seetharaman in New York and Kyle Peterson in Chicago; editing by Gunna Dickson)