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Spirit AeroSystems beats expectations with surprise profit

  • Spirit AeroSystems Holdings Inc. swings to net income in Q4
  • Company reports fourth-quarter profit of $58.7 million, beating expectations
  • Revenue increases by 37.3% to $1.81 billion
  • Boeing 737 Max production rate increases impact financial guidance
  • Spirit AeroSystems’ stock climbs 1.1% in premarket trading

Introduction

Spirit AeroSystems Holdings Inc., a leading aircraft-components maker, surprised investors on Tuesday by reporting a net income of $58.7 million in the fourth quarter. This marked a significant turnaround from the net loss of $243.1 million in the same period a year ago. While the unexpected profit is certainly a positive development for the company, Spirit AeroSystems is withholding financial guidance until the timing of Boeing 737 Max production rate increases becomes clear. This decision reflects the ongoing uncertainty surrounding the troubled aircraft model and its impact on the industry.

Main Content

Spirit AeroSystems Swings to Net Income in Q4

For the quarter ending December 31, 2020, Spirit AeroSystems reported a net income of $58.7 million, translating to earnings per share of 52 cents. This is in stark contrast to the net loss of $243.1 million, or $2.32 per share, in the same period the previous year. Adjusted earnings per share, excluding nonrecurring items, came in at 48 cents, exceeding the FactSet consensus for a per-share loss of 35 cents.

Revenue Soars, Beating Expectations

Spirit AeroSystems’ revenue for the fourth quarter surged by 37.3% to $1.81 billion, surpassing the FactSet consensus of $1.74 billion. The strong performance was driven by a 42.6% increase in commercial revenue and a 12.1% growth in defense and space revenue. Deliveries also saw a significant uptick, rising by 16% to 398 shipsets. Notably, Boeing 737 deliveries experienced a 28% jump to 104 shipsets.

Boeing 737 Max Uncertainty Impacts Guidance

While Spirit AeroSystems’ positive financial results are encouraging, the company remains cautious about providing guidance due to the uncertain production rate increases of Boeing 737 Max. Spirit AeroSystems plays a significant role in the production of this aircraft model, and any changes in production rates will directly impact the company’s financial performance. The grounding of 737 Max 9 aircraft following an inflight panel blowout has already led to a 16% decline in Spirit AeroSystems’ stock this year.

Conclusion

Spirit AeroSystems’ surprise fourth-quarter profit demonstrates the company’s ability to overcome challenges and adapt to market conditions. However, the decision to withhold financial guidance underscores the continuing uncertainty surrounding the Boeing 737 Max. Investors and industry observers will be closely monitoring the timing of production rate increases and their potential impact on Spirit AeroSystems’ future performance.

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