Aviation

2010 is crucial for Spirit

This year is pivotal for Spirit AeroSystems. The company has six new development programs in the works. All of them — Boeing's 787, 747-8 and P-8A, Gulfstream's G250 and G650, and the BR725 thrust reverser — are in the flight test stage.

They will be moving into the initial stages of production, said Spirit CEO Jeff Turner.

"They all need care and feeding at the same time," Turner said. "It's like having sextuplets instead of having one (child) every couple of years."

Still, Spirit is making good progress on the programs and is meeting development milestones, the company said Thursday.

Spirit delivered the fourth wing for the Gulfstream G250 program and the fifth wing, inlet and thrust reverser units for the Gulfstream G650.

Spirit continues to make engineering changes to its portion of the 787 Dreamliner as the plane goes through flight testing. Change requests, however, are slowing down.

Turner talked about Spirit to analysts and The Eagle on Thursday as the company released first-quarter earning results.

Spirit recorded revenue of $1.04 billion in the first quarter, up 18 percent from $887 million in the first quarter of 2009.

Net income for the quarter totaled $56 million, down 11 percent from $63 million a year ago.

Spirit's backlog at the end of the first quarter totaled $28 billion, stable from its backlog at the end of 2009.

Spirit's guidance for 2010 includes revenue from $4 billion to $4.2 billion and per-share earnings from $1.50 to $1.70 a share. That remains unchanged from previous guidance.

Spirit stock fell $1.20 on Thursday to $22.20.

Turner sent a note to employees Thursday saying the company isn't performing as well as it can.

"We've got to continuously improve," he said.

"It's not always easy and it's not always pretty, but we'll get through it. We've got a great team."

Last year analysts predicted that Boeing would have to cut airliner production rates as the economy affected the airlines. But the down cycle predicted for the commercial aerospace market hasn't materialized, and long-term prospects are improving, Turner said.

Boeing officials recently said that they're considering whether to raise production rates of the single-aisle 737. Spirit produces the plane's fuselage.

How much Spirit could raise 737 production will depend on how quickly it would have to ramp up. It can handle a 10 percent or so increase from the current rate of 31 a month, Turner told analysts. But 20 percent would take some bigger planning.

Spirit is in the midst of labor negotiations with the Machinists union, which represents its hourly work force. The current contract expires June 25.

"With what I'm seeing and what I'm hearing in labor negotiations, it's so clear our desires are aligned," Turner said.

Both want a healthy company, and a team that can stay intact in the future, he said. The details must be worked out.

"I'm frankly optimistic that we'll find solutions that meet the company's needs and the needs of our employees," he said.

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