New York - US aerospace giant Boeing reported Wednesday that its third-quarter net income fell 38 per cent year-on-year to 695 million dollars, as the company was hit by the costs of a protracted machinists' strike.

Earnings per share in the period came to 0.96 dollars, down 33 per cent from the third quarter last year, with Boeing also citing the costs of supplier production problems on customer-furnished galleys for some wide-bodied planes.

Revenues in the third quarter slipped 7 per cent to 15.3 billion dollars, Chicago, Illinois-based Boeing said.

A strike by some 27,000 machinists which began in early September has paralyzed production at Boeing. A new round of negotiations is set to take place Thursday.

With the duration and outcome of the labour dispute still uncertain, Boeing said it would only be able to provide a financial outlook and a schedule for plane deliveries after the strike ended.

But chairman and chief executive Jim McNerney, was cautiously optimistic about Boeing's ability to cope.

"While the suspension of commercial airplane deliveries had a major impact on the quarter, we effectively executed the remainder of our business and kept our focus on the strong balance sheet we have built over the past few years," he said in a statement.

"That balance sheet, along with our broad-based, record $349 billion backlog, gives us exceptional flexibility for weathering an extended work stoppage and for adapting to circumstances that may arise from the global financial crisis and softening global economy," he added.

For the first nine months, Boeing's net income came to 2.8 billion dollars, down 9 per cent from the same 2007 period. Revenues, at 48.2 billion dollars, were off a slight 1 per cent year-on-year.