Spirit AeroSystems Sees Another Quarter Of Revenue Decline
Spirit AeroSystems reported continuing declines in revenue and income during the third quarter.
The aerospace manufacturing company said Tuesday that revenues in the quarter were $806 million, down about 60% from a year ago. Spirit had a loss of more than $150 million in net income, bringing its losses for the year to more than half a billion dollars.
As bad as the figures were, they were both improvements over the second quarter.
Spirit is traditionally the city’s largest employer. But it was staggered earlier this year by reduced production of Boeing’s 737 Max, a program which accounted for nearly half of Spirit’s revenue in 2019.
That was followed by the pandemic, which has significantly reduced air travel across the world and the demand for new aircraft.
The company has laid off about 8,000 employees this year – more than 40 percent of its workforce – and instituted furloughs for many others. It also has closed some its facilities, most recently a plant in McAlester, Oklahoma.
"Spirit, as well as the overall aviation industry, are in the early stages of a multiyear recovery," Mark Suchinski, Spirit’s chief financial officer, said on a call with investors after the earnings were announced. "And we expect to continue to face near-term challenges."
One of those challenges is when the 737 Max will return to service. It was grounded in March 2019 following two fatal crashes, which caused Boeing to halt production.
It has since resumed production, but at much lower levels. In the third quarter, Spirit delivered 15 shipsets to Boeing – the plane’s fuselage and other structures —compared to 154 in 2019.
Spirit President and CEO Tom Gentile thinks the 737 Max is getting close to flying again.
"We’ve been encouraged by the news of the continued progress Boeing has been making with the FAA and global regulators to return the aircraft to service," Gentile said.
"We are a proud partner on the Max; we make 70 percent of the structure. We are looking forward to seeing the airplane safely back in service."
Boeing expects 737 Max production levels to reach about 50 percent of 2019 output in 2022.
More positive news, Gentile said, is Spirit closing on the purchase of aerostructure manufacturing assets from Bombardier. The assets includes facilities in Casablanca, Morocco; Belfast, Northern Ireland; and Dallas.
Company officials say the purchase will give Spirit more work on the Airbus 220, access to more defense work and make it the exclusive supplier for Bombardier business jets.
Spirit's said its backlog of work at the end of the third quarter was about $40 billion, which included work on all of its Boeing and Airbus commercial programs.