Spirit AeroSystems posts solid profit on 19 percent revenue gain in 2nd quarter

08/01/2014 9:56 AM

08/08/2014 2:34 PM

After two years of rocky financial performance, Spirit AeroSystems has turned in its second healthy quarterly results this year.

Revenue and net income at Spirit AeroSystems rose significantly in the second quarter, the result of strong demand for large commercial aircraft and strong mature program operating performance, the company said.

Spirit’s second-quarter revenue totaled $1.8 billion, up 19 percent from $1.5 billion for the same time a year ago.

Net income for the quarter totaled $143 million, or $1.01 per share, up from a loss of $209 million, or a loss of $1.47 per share, a year ago.

“Spirit continues to grow with the commercial aerospace up cycle and realize improved operational performance,” Larry Lawson, Spirit president and CEO, said in a statement.

Spirit continued to execute record production rates while improving quality, and it made significant progress on the Airbus A350 program, Lawson said.

Spirit’s backlog at the end of the second quarter totaled $41 billion.

“Looking to the future, Spirit’s value proposition is attractive as the commercial aerospace cycle remains strong and program execution and operational performance continue to be our focus,” Lawson said.

Spirit raised its revenue guidance for 2014 from a range of $6.5 billion to $6.7 billion to a range of $6.7 billion to $6.9 billion, based on Boeing’s 2014 delivery guidance of 715 to 725 aircraft, expected Airbus deliveries at similar levels to 2013, internal Spirit forecasts for other customer production activities, expected nonproduction revenue and foreign exchange rates generally consistent with those of the second quarter of this year, the company said.

Steven Cahall, an analyst with RBC Capital Markets, noted it was a good quarter for Spirit, the second in a row after a number of missteps, he said.

“Though perhaps not yet a pattern, we think the new management team is building confidence with investors,” Cahall wrote in a note to investors.

Spirit has made “big progress,” Peter Arment, an analyst with Sterne Agee, wrote to investors.

Revenue in all three of Spirit’s segments, including propulsion systems, fuselage systems and wing systems, were up double digits year over year from strong demand for commercial jets, Arment wrote.

Second-quarter performance “demonstrated how (Spirit’s) operations are set up to garner significant leverage to the aerospace cycle when executing,” he wrote.

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