Spirit AeroSystems’ Q1 sees lagging revenue, uptick in 737 Max deliveries
Revenue was down again for Spirit AeroSystems during the first quarter of 2021, but the company delivered more 737 MAX shipsets than during the first three months of last year.
In a financial report released Wednesday morning, the Wichita-based aerostructures manufacturing giant blamed the lagging revenue on the lack of demand for wide-body aircraft.
“A year ago we were grappling with unprecedented disruption and uncertainty,” Spirit CEO Tom Gentile said in the release. “The recovery this year is underway but slower than expected, particularly for international air travel, which is creating headwinds for the wide-body programs.”
Revenue dropped to $901 million for the first quarter, down $176 million from $1,077 million for the same period last year.
But the outlook isn’t entirely bleak.
From January through March, Spirit delivered 29 Boeing 737 MAX shipsets compared to 18 during the first three months of 2020. The company expects to deliver roughly 160 737 max shipsets in 2021, which Gentile said means more employees returning to work in Wichita.
“We’ve recalled about 600 employees back in Wichita, and we expect to recall probably double that over the course of the year,” Gentile said in a conference call with analysts Wednesday.
Spirit laid off about 2,800 workers last January when the future of the 737 Max seemed uncertain, but after reaching an agreement with Boeing, production slowly resumed.
Gentile said he expects Spirit’s overall production rates will start to normalize in the back half of 2021. He expressed optimism that the company’s cash flow will turn positive by 2022.
“While a broader air traffic recovery will continue to take some time, we are encouraged by improving domestic air travel, which is primarily served by narrow-body aircraft,” Gentile said. “We believe Spirit is well positioned to benefit from this improvement given about 85% of our backlog consists of narrow-body aircraft.”
He said the company intends to utilize its excess wide-body production capacity to pursue defense program opportunities.
Spirit delivered 15 Boeing 787 shipsets in the first quarter compared to 40 during the same period last year.
“Over the past few months, we have also been performing ongoing 787 engineering analysis and rework to support Boeing’s resumption of deliveries in the first quarter of 2021, which has resulted in a forward loss,” Gentile said. “We are pleased to see that Boeing resumed 787 deliveries in the first quarter.”
Spirit’s operating loss for the first quarter was $125.9 million, down $41.6 million from $167.5 million. The company’s cash balance through the first three months of the year was $1.4 billion.
Spirit reported earnings per share of negative $1.65 compared to negative $1.57 per share in the same quarter of 2020.
This story was originally published May 5, 2021 at 7:43 AM.