Spirit AeroSystems Set to Adjust to Jet Makers' Output Changes
February 03 2016 - 2:18PM
Dow Jones News
By Doug Cameron
Spirit AeroSystems Holdings Inc. said Wednesday it was well
placed to adjust to planned changes in output by the world's two
largest jet makers, calming investors who remain nervous about a
potential oversupply of aircraft.
The company's production of large components for Boeing Co.,
Airbus Group SE and the big engine manufacturers make Spirit a key
bellwether of the health of the aerospace supply chain ahead of
large planned increases in output.
Spirit Chief Executive Larry Lawson said it wouldn't need to
construct a new factory to expand production of fuselages for the
Boeing 737 as the aerospace company boosts monthly production to 47
and then beyond to 52 and eventually 57.
His comments on an investor call came as Spirit reported a
quarterly profit alongside 2016 guidance that was broadly ahead of
analysts' expectations, even though it incorporated planned trims
in Boeing's output this year as it prepares to introduce new
airplane models.
Boeing's surprise announcement last week that deliveries would
fall this year from 2015's record level added to existing pressure
on the shares, which are down 17% this year, the second-worst
performer on the Dow Industrial benchmark index. Airbus shares have
lost 14% in 2016.
"We haven't seen a slowdown in demand," said Boeing Chief
Financial Officer Greg Smith on a separate investor call.
Spirit Chief Financial Officer Sanjay Kapoor said discussions
with Airbus and Boeing remain fluid over production changes, but
declined to give further details.
The company produces fuselage parts for the Airbus A350, and the
European plane maker plans a big boost in production this year to
more than 50 jets. The company delivered 14 of the planes last
year, one fewer than planned when a component supplier failed to
meet commitments.
Spirit reported fourth quarter profit of $138.3 million compared
with a loss of $106.2 million a year earlier, with adjusted
per-share earnings of 95 cents falling seven cents short of
consensus. Sales rose 2% to $1.61 billion.
The company forecast revenue of $6.6 billion to $6.7 billion in
2016, in line with last year when it delivered "shipsets" of
components for 763 Boeing jets and 632 Airbus planes. Mr. Kapoor
said the 2016 guidance reflected higher deliveries for the Airbus
A320 and A350 programs and "steady" rates on the Boeing 737 and 787
jets. Deliveries related to the Boeing 777 and 747 and Airbus A330
are expected to decline from last year.
Separately, Mr. Lawson said he had no "imminent' plans to step
down, though Spirit continued to beef up its executive team and
normal succession planning. A media report last week said the
company was seeking a chief operating officer as part of a
potential succession plan for the CEO.
Jon Ostrower and Robert Wall contributed to this article.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
February 03, 2016 14:03 ET (19:03 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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