Spirit AeroSystems CEO pledges renewed focus after $204 million loss in Q3

Spirit AeroSystems reported $204 million in third-quarter losses, driven by a combination of rising labor and supply chain expenses and the costly rework of many Boeing 737 MAX fuselages.

Revenues were up to $1.4 billion in Q3, the company reported Wednesday. That’s a 13% increase from the same period last year, but Spirit also lost $76 million more than it did from July to September 2022.

Spirit now plans to deliver between 345 and 360 737 MAX fuselages this year — down from its initial target of 390 to 420 shipsets in 2023 and down from the adjusted target of 370 to 390 units given by executives in August.

In his first earnings call since taking over for longtime Spirit CEO Tom Gentile last month, Patrick Shanahan, a former Boeing executive, told investors he plans to stay on the job for a year and that his “principle goal” will be restoring positive cash flow.

“Our priority is to strengthen Spirit financially. The signing of the memorandum of agreement with Boeing was an important step forward,” Shanahan said, referring to the deal inked last month that pumped $100 million into the cash-strapped Wichita-based aerostructures supplier.

In turn, Spirit must demonstrate a reduction in quality defects, which have plagued the company over the last year, and implement an operational sustainability plan “to Boeing’s satisfaction.” The deal also extends the timeline for Spirit to reimburse Boeing for $180 million in advance payments granted this year during Spirit’s ongoing financial struggles.

On the call, Shanahan indicated reaching a similar agreement with Airbus focused on the underperforming A220 program will be a high priority for Spirit in the coming months.

Spirit delivered 332 shipsets in Q3, including 83 737 MAX units compared to 69 last year.