Spirit AeroSystems continues burning through money, delivers fewer planes in Q2

Spirit AeroSystems turned in a disappointing second-quarter performance, delivering fewer Boeing 737 fuselages and burning through more cash than it did between April and June of 2023.

The company’s Q2 financial report, released Monday, covers the period immediately before news of Boeing finalizing a deal to buy back Spirit broke on July 1.

Spirit’s stock closed down 2.24% Monday.

The Wichita manufacturer reported spending $597 million on operations, more than the $444 million spent in the first quarter of 2024 and nearly three times what it spent in Q2 of last year.

At the same time, Spirit’s 737 MAX deliveries cratered from 74 shipsets to 27 year-over-year. The report explains the dropoff as the result of the more deliberate product verification process that has been in place since the Federal Aviation Administration demanded changes after a faulty door plug blew out of an Alaska Airlines 737 mid-flight in January.

“While we have made significant improvements in the quality of our product, our financial results were negatively impacted by delivery delays as we continue to optimize the product verification process,” Chief Financial Officer Irene Esteves said in the release, which notes that the Wichita plant produced MAX aircraft at a rate of 31 shipsets per month.

“Once the completed units can be fully inspected and accepted by the customer, they will be considered delivered which will allow Spirit to collect on those units,” the release states.

Production rates on other commercial programs ticked up from Q2 of last year, resulting in an overall decrease of just six shipsets from 342 to 336.

“This has been a dynamic and eventful period for the company, and I want to extend my gratitude to each employee for their dedication and hard work,” CEO Pat Shanahan is quoted as saying. “Their commitment, resilience and teamwork have driven meaningful improvements in safety, compliance and quality while continuing to meet our customer commitments.”

According to Spirit, changes to the product verification process, lower than planned 737 MAX production rates and the lack of price increases on Airbus programs in the first half of 2024 have resulted in the company significantly lowering its revenue projections for the year. However, Spirit declined to say just how much of a hit projected revenues have taken.

“In light of the previously announced merger agreement with Boeing, and consistent with customary practice during the pendency of such transactions, Spirit will no longer provide [financial] guidance,” the release states.

Citing the same reason, Spirit opted not to hold its customary financial report conference call, which allows analysts to ask Shanahan and other executives questions about the company.