Spirit AeroSystems Slides On Q1 Earnings Miss Amid Quality Issue

  • Spirit AeroSystems Holdings, Inc. (NYSE:SPR) reported first-quarter FY23 revenue growth of 22% year-over-year to $1.43 billion, missing the consensus of $1.52 billion.
  • The revenue increase reflects higher production deliveries on Boeing Company (NYSE:BA) 737 program and increased Defense and Space revenue, partially offset by lower production deliveries on the Airbus SE (OTC:EADSY) A220 program.
  • Sales by segments: Commercial $1.15 billion (+22.4% Y/Y), Defense & Space $188.4 million (+18.9% Y/Y), and Aftermarket $94.5 million (+21.5% Y/Y).
  • Adjusted EPS was $(1.69) versus $0.03 in 1Q22, missing the consensus of $(0.29).
  • Operating loss expanded to $(95) million from $(42) million a year ago.
  • SPR cash used in operations narrowed for the quarter to $(46) million vs. $(270) million a year ago and free cash flow usage of $(69) million for Q1.
  • Spirit's backlog was ~$37 billion at the end of Q1, with work packages on all commercial platforms in the Airbus and Boeing backlog.
  • The cash balance at the end of the quarter was $568 million.
  • Spirit AeroSystems delivered 346 shipsets versus 321 last year.
  • 737 Program - Vertical Fin Attach Fittings Update: SPR identified the affected units in Wichita and has begun implementing repairs to those units.
  • SPR expects disruptions and rework within its Wichita factory to negatively impact full-year gross profit by $31 million, of which $17 million is reflected in 1Q23.
  • RelatedSouthwest Airlines To Face The Heat Of Boeing's 737 MAX Manufacturing Fault: Report
  • Price Action: SPR shares are trading lower by 7.21% at $27.80 on the last check Wednesday.
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