#USA #Wichita #Boeing #Q4 2024 #Spirit AeroSystems

Financial Results Overview

Spirit AeroSystems Holdings, Inc. announced its fourth-quarter financial results for 2024 on February 28, 2025, revealing mixed financial performances as it gears up for a significant acquisition by Boeing expected in mid-2025.

In Q4 2024, Spirit posted revenues of $1.7 billion, marking a 9% decrease compared to the same period last year. This decline was influenced primarily by changes stemming from a Memorandum of Agreement (MOA) with Boeing, which resulted in positive pricing for the Boeing 787 but also some adjustments that reflected challenges in production, particularly for the Boeing 737 and other commercial aircraft.

Despite the decrease in revenue, Spirit demonstrated resilience in operational efficiency, with cash from operations increasing to $137 million and free cash flow improving to $91 million, thanks to increased deliveries of Boeing 737 aircraft and proactive working capital management. The company noted a significant advancement in its process improvement efforts, reflected in a twofold increase in 737 deliveries and notable gains in A220 and A350 deliveries.

Earnings Snapshot

However, the company's earnings reports were sobering. Spirit reported an Earnings Per Share (EPS) of $(5.38), a stark fall from $0.66 in Q4 of the previous year. Adjusted for certain deferred tax assets and pension-related charges, the adjusted EPS stood at $(4.22), significantly below the $0.62 from a year prior. This considerable drop in profitability can be attributed to forward losses of $440 million associated with key programs and escalating labor and supply chain costs.

Looking at total segment results, the commercial revenue decreased by 16.6% compared to the year-ago quarter, impacted by the prior year's favorable contract terms from the MOA, while defense revenues saw a surge of 30.9%, mainly due to heightened activity on programs like the Sikorsky CH-53K.

A standout figure for the company was its backlog, which remains robust at approximately $47 billion, benefiting from solid order volumes across Airbus and Boeing's commercial platforms. This large backlog indicates potential profitability in the future as operations stabilize.

Strategic Direction and Future Outlook

President and CEO Pat Shanahan emphasized the company’s commitment to operational improvements ahead of the impending Boeing acquisition. With effective transition plans being developed, the management is optimistic about creating shareholder value while meeting customer demands. The company continues to pursue efficiencies, hoping that strategic operational restructuring can yield better performance.

Spirit’s management also expressed cautious optimism regarding liquidity enhancement plans. Noteworthy agreements with customers Boeing and Airbus have provided essential cash advances to bolster operational flexibility.

While operational focus will remain on smooth integration with Boeing, there are significant hurdles to navigate. Production and delivery adjustments from Boeing have resulted in lower anticipated outputs and volumes for the upcoming year. The merger and associated financial implications continue to loom large over operational strategies.

In light of speculation surrounding its future, the company refrained from issuing guidance for 2025. Moreover, conference calls around these financial results have been omitted temporarily to increase focus on the merger.

Spirit AeroSystems remains in a complex position, balancing its challenges against positive operational strides. As it heads deeper into 2025, the electric dynamics of the aerospace sector, coupled with the impending merger, will prove pivotal in shaping the next chapter of Spirit's journey in the aerospace manufacturing landscape.