First-quarter losses surge at Spirit AeroSystems

(Sharecast News) - Losses at Spirit AeroSystems Holdings soared in the first quarter, the Boeing supplier confirmed on Tuesday, as production slowed and inventory built up. The US engineering firm, which builds the fuselage for the Boeing 737 Max, said net revenues rose 19% in the three months to 28 March, to $1.7bn.

But losses came in at $617m, compared to $281m a year previously, while losses per share widened to $5.31 from $2.68.

Spirit - which in March confirmed it was in takeover discussions with Boeing - was audited by the US Federal Aviation Administration this year after a door panel in a Max 373 blew out during an Alaska Airlines flight in January.

An initial report by the National Transportation Safety Board found that four key bolts that were meant to lock the unused door to the fuselage appeared to be missing. Spirit had made and supplied the panel to Boeing.

Pat Shanahan, Spirit chief executive, said: "The first quarter was characterised by several events. One of great significance was the partnership with Boeing to make improvements to the safety and quality of our production systems.

"We collaborated with Boeing to align 737 fuselage product inspection as close as possible to where the work is performed at our factories in Wichita."

However, the Kanas-based firm noted that deliveries to Boeing had as a consequence been delayed, and inventory had built up. An anticipated increase in production has also been delayed.

Spirit said its current Boeing 737 production rate was now around 31 aircraft per month.

It continued: "Spirit's ability to align factory costs, which include both internal and supply chain-related spending, and to react to sudden changes in productions rates, will have a material impact on results of operations and cash flows throughout 2024."

The company said it would not provide any financial guidance, however, until there was "further clarity" on the acquisition discussions with Boeing as well as the ongoing commercial negotiations with its other key customer, Airbus.