Spirit AeroSystems stock drops after losses were much wider than forecast, quality issue identified on fittings for some Boeing 737s

Shares of Spirit AeroSystems Holdings Inc. (SPR) dropped 4.5% in premarket trading Wednesday, after the maker of components used in commercial and defense aircraft reported a much wider-than-expected loss and revenue that came up short, and said a quality issue on components used in Boeing Co.'s (BA) 737 planes hurt results. Net losses widened to $281.2 million, or $2.68 a share, from $52.8 million, or 51 cents a share, in the year-ago period. Excluding nonrecurring items, the adjusted per-share loss of $1.69 was much wider than the FactSet loss consensus of 29 cents. Revenue grew 21.8% to $1.43 billion, but was below the FactSet consensus of $1.52 billion. The company said it notified Boeing of a "quality issue" on the vertical fin attach fittings of certain models of the 737 fuselage that Spirit manufactures, and worked with Boeing and the Federal Aviation Administration to confirm it was not an immediate safety of flight issue. Spirit costs from disruptions and rework of the Wichita factory in which the quality issue stemmed is expected to cut profit by $31 million in 2023, of which $17 million was reflected in first-quarter results. "Additional costs are expected, including costs Boeing may assert to repair certain models of previously delivered units in their factory and warranty costs related to affected 737 units in service," Spirit said in a statement. Spirit's stock has tumbled 13.0% over the past three months through Tuesday while the S&P 500 has slipped 0.4%.

-Tomi Kilgore

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05-03-23 0816ET

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