Oct. 15 (Bloomberg) -- Boeing Co.'s machinists strike, a slump in demand and the global credit crisis are starting to trigger more reduced forecasts for aircraft parts suppliers such as United Technologies Corp. and Honeywell International Inc.

Quarterly and full-year analysts' estimates have already been scaled back for Boeing, whose factories have been idle since Sept. 6. As the world's No. 2 planemaker and its vendors report third-quarter results over the next two weeks, analysts are braced to cut estimates for companies. Seatmaker BE Aerospace Inc. two days ago said profit will be lower through 2010.

``The `unholy trinity' of the credit crunch, declining air traffic and the Boeing strike'' will hurt earnings at Goodrich Corp., the largest maker of landing gear, Robert Stallard, an analyst at Macquarie Capital Ltd. in New York, said in a report today.

Stallard cut 2009 estimates for companies including Goodrich, United Technologies, Textron Inc. and former Boeing unit Spirit AeroSystems Holdings Inc., which he called ``more Boeing than Boeing'' because of its reliance on the commercial market.

Commercial aerospace suppliers including Honeywell, United Technologies and Rockwell Collins Inc. still benefited in the third quarter from record order backlogs and may report higher profits, based on average estimates in Bloomberg analyst surveys. Profit may decline at Boeing and Spirit, which cut production when the strike started, as well as at planemaker Textron, whose finance arm has struggled in a weaker economy.

Still, the companies will likely knock down investors' expectations for coming quarters, analysts said.

Boeing Earnings

``The consensus estimates don't reflect the reality'' of declining demand for aircraft, parts and services, said Peter Arment, a Greenwich, Connecticut-based analyst with American Technology Research. ``The one caveat that's affecting everything is the Boeing strike.''

Chicago-based Boeing, which trails only Airbus SAS in building commercial planes, may say Oct. 22 that third-quarter net income fell to $1.22 a share from $1.44 a year earlier, according to the average of 15 analysts' estimates in a Bloomberg survey. The projection was cut by 18 cents in the past month as the strike extended.

Analysts estimate the walkout is costing Boeing $100 million a day in lost revenue because it's paid upon delivery of planes, and none are leaving the factories. Boeing and the International Association of Machinists and Aerospace Workers broke off talks again this week over a union demand to limit work by contractors.

Chief Executive Officer Jim McNerney told employees Oct. 6 that Boeing needs flexibility to react quickly with outsourcing.

Once the 27,000 Boeing machinists return to work, they'll have more than seven years' worth of orders to keep them -- and the companies that make parts they use -- busy.

Suppliers

Suppliers benefited in the just-ended quarter from backlogs of orders from other planemakers including Airbus, Bombardier Inc. and Empresa Brasileira de Aeronautica. Airlines have been ordering new jets that use less fuel. Airbus said today it will delay a planned increase in production because of the financial crisis my reduce passenger traffic.

Hartford, Connecticut-based United Technologies, the maker of Pratt & Whitney engines, tomorrow may say third-quarter profit rose to $1.31 a share from $1.21 a year earlier, based on the average estimate. Morris Township, New Jersey-based Honeywell, the world's largest maker of airplane instruments, on Oct. 17 may say net income advanced to 95 cents a share from 81 cents.

Rockwell Collins, the Cedar Rapids, Iowa-based maker of cockpit instruments, may say Nov. 5 that its fiscal fourth- quarter profit increased to $1.07 a share from 93 cents.

Average Estimates

Even with the global credit crisis and continued shutdown at Boeing, fourth-quarter estimates for United Technologies, Honeywell and Rockwell Collins all have declined 1 cent or less in the past four weeks, according to Bloomberg data. Analysts say that suggests more lowered projections are coming.

``Everybody's going to see an October that's going to be messy, and it will spill into most people's November,'' said Howard Rubel, a New York-based Jefferies & Co. analyst.

Textron, the maker of Cessna planes and Bell helicopters, may say tomorrow that third-quarter earnings fell to 87 cents a share from 95 cents, based on the average estimate.

The Providence, Rhode-Island based company's finance arm, which includes aircraft leasing, saw an 81 percent drop in second-quarter profit because of an increased provision for loan losses, a decrease in fee income and higher borrowing costs.

Aerospace companies in some ways are better prepared for the current economic woes than they might have been in the past, analysts said. Having survived the crises of the 2001 terrorist attacks and subsequent wars and epidemics that damped demand for new planes, most aerospace companies now have ``killer balance sheets,'' with plenty of cash and not much debt, Rubel said.

``The industry was prepared for a shock, and it'll be able to cope with it reasonably well,'' Rubel said.

Boeing and Airbus have the capability to provide ``several billions of dollars'' of their own financing if customers need help, without affecting their credit ratings, said Craig Fraser, an analyst with Fitch Ratings in New York.

To contact the reporter on this story: Susanna Ray in Seattle at sray7@bloomberg.net.

Last Updated: October 15, 2008 11:22 EDT