Spirit primed for robust year with $47 billion backlog

It’s a robust time for Spirit AeroSystems, the Wichita-based aviation supplier that makes parts for all Boeing commercial airliners as well as some Airbus jets.

The company, which employs 11,000 people in Wichita – and also has operations in Chanute, Oklahoma, North Carolina and the United Kingdom – delivered a record 1,545 shipsets and generated revenue of $6.8 billion in 2014.

It posted a profit of $354 million last year, and it also shed the problematic Gulfstream business jet wing programs.

Following the release of its earnings, analysts were positive about the company’s prospects going into 2015.

“We think Spirit made an important turn during 2014 from a company with inconsistent results and weak cash flow to one with more consistent performance and stronger cash flows,” Wells Fargo senior analyst Sam Pearlstein wrote in a research report to investors after Spirit released its 2014 financials in early February.

“It remains the best value and organic growth story within the supply chain,” wrote Stern Agee analyst Peter Arment in his report to investors on Spirit’s 2014 results.

The company is benefiting from its largest customer, Boeing Co., which airline industry consultant Robert Mann said is benefiting from a profitable airline business.

Mann said airlines have been recording historic profit margins, and they’re using their extra cash to replace older airplanes as well as to buy more fuel-efficient ones.

In 2014, Boeing delivered 723 jetliners, a nearly 12 percent increase from 648 deliveries in 2013.

For Boeing, Spirit builds the entire fuselage of the 737, Boeing’s biggest-selling jet. Boeing delivered 485 737s last year.

Spirit also builds parts of the 777, 767 and Boeing’s newest jet, the 787. For the 787, Spirit manufactures the forward fuselage of the widebody jet, which encompasses the cockpit and most of first class.

From a workload standpoint, Spirit should continue to see a robust year in 2015.

Larry Lawson, Spirit’s president and CEO, told analysts last month that the company has an eight-year backlog of work, totaling $47 billion, which was a company record.

Spirit spokesman Jarrod Bartlett said the company is currently manufacturing 42 737 fuselages a month. That rate is expected to increase to 47 a month in 2015, and to 52 a month by 2018.

Also set to increase are the 787 forward fuselages. Bartlett said Spirit currently produces 10 a month. Spirit will be increasing that production to 12 a month by 2016. By 2020, he said, the company expects to be delivering to Boeing 14 787 forward fuselages a month.

But its aircraft parts production isn’t limited to just Boeing jets.

Spirit also manufactures the middle section of Airbus’ new A350XWB widebody jet, work that is done at Spirit’s Kinston, N.C., plant. It also manufactures parts of the wings for the Airbus A320 narrowbody jet and the A380 jumbo jet.

In 2014, Airbus delivered 629 aircraft, which the company, based in Toulouse, France, said was a record.

Bartlett said other aircraft programs Spirit makes parts for are the Mitsubishi Regional Jet, Sikorsky Aircraft Corp.’s CH-53K heavy lift helicopter and Textron’s Bell V-280 Valor tilt-rotor aircraft program.

He said future work for the company would likely include Boeing’s 777x program.

“That’s not in production yet, but it’s safe to say we will be doing work on the 777x,” he said.

This story was originally published February 27, 2015 at 6:00 AM with the headline "Spirit primed for robust year with $47 billion backlog."