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Dive Brief:
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Spirit AeroSystems ended 2024 with a $2.14 billion net loss as a result of production and delivery changes implemented by its biggest customer Boeing, according to a Feb. 28 earnings report.
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The changes included lower than planned Boeing 737 production rates, the aerospace supplier said. Other challenges included a lack of price increases on Airbus’s plane programs.
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Spirit AeroSystems’s Q4 2024 revenue was down 8.9% year over year to $1.7 billion. Full-year revenue, however, was up 4% YOY to $6.3 billion as a result of higher Boeing 737 deliveries, as well as the timing of working capital, according to the securities filing.
Dive Insight:
In addition to the losses, Spirit AeroSystems’ backlog in Q4 was approximately $47 billion, which included work packages from Airbus and Boeing’s commercial platforms backlog.
Boeing and Airbus are Spirit AeroSystems’ largest customers, with 58% and 21% of its revenue generated from the two companies’ sales, respectively, according to its FY2024 annual securities filing.
Despite last year’s financial advances from Boeing and Airbus, Spirit AeroSystems said it will need to obtain additional funding to sustain operations as it expects losses to continue for the foreseeable future.
Nevertheless, the supplier’s leadership has developed a plan and taken several actions to generate more cash, according to the earnings report. One such move was the closure of its $165 million sale of former subsidiary Fiber Materials Inc. to specialty textile manufacturer Tex-Tech in January.
The supplier made another amendment to its cash advance and 737 production rate repayment agreements with Boeing, moving the deadline from 2024 to 2026, according to a Jan. 22 securities filing. Finally, it amended its credit loan agreement with banks last month, according to the earnings report.
Additionally, nearly 78 million shareholders voted to approve Spirit AeroSystems’s merger agreement with Boeing, according to a Jan. 31 securities filing. The supplier did not hold an earnings call due to the pending Boeing acquisition, according to the earnings report.
As for Spirit AeroSystems’s other major customer, Airbus, the two parties are in discussions to divest the supplier’s facilities in Belfast, Ireland, and Saint-Nazaire, France. Airbus has been facing supply chain challenges, notably with Spirit AeroSystems, as it aims to ramp up production of its A350 and A220 planes, CEO Guillaume Faury said in the planemaker’s Feb. 20 earnings call.