Boeing Co. has lowered its profit forecast for the year 2006, as it has had to account for more than 1 billion U.S. dollars in charges to its defense business, The Washington Post reported on Thursday.

One of the charges, amounting to 571 million dollars, has arisen out of a Justice Department investigation into the firm's illegal hiring of a high-ranking Air Force official and the company's use of Lockheed Martin Corp. proprietary documents to win government work.

Boeing officials determined that most of the settlement was tax deductible, although they said on Wednesday that they would not pursue the benefit, which would have raised protests from some in Congress, the report said.

"Without question the short-term financial impact of the taxability issue is significant," W. James M. McNerney Jr., Boeing chief executive, said in a conference call with analysts. "However, the long-term value of Boeing's reputation is even more significant."

The company also took a 496 million dollar charge into account for two troubled foreign contracts to supply surveillance planes to Australia and Turkey.

The technology needed for the planes turned out to be more difficult than expected, and the company said the charge would cover a 15 percent cost overrun on the fixed-price contracts, which are worth around 4 billion dollars, and some penalty payments, according to the report.

Source: Xinhua