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Spirit AeroSystems (SPR) Q3 Earnings Miss, Backlog Slips Q/Q

Zacks Equity Research

Spirit AeroSystems Holdings, Inc. SPR reported third-quarter 2019 adjusted earnings of $1.38 per share, which missed the Zacks Consensus Estimate of $1.67 by 17.4%. Moreover, on a year-over-year basis, the bottom line declined 19% from $1.70 per share.

Barring one-time adjustments, the company reported GAAP earnings of $1.26 per share compared with $1.59 in the year-ago quarter.

Highlights of the Release

Total revenues of $1,920 million lagged the Zacks Consensus Estimate of $1,966 million by 2.3%. However, the top line rose 6% from $1,814 million on a year-over-year basis.

Backlog at the end of third-quarter 2019 was $44 billion, lower than $46 billion in the prior quarter.

Segment Performance

Fuselage Systems: Revenues at the segment grew 1.4% to $1,005.3 million from $991 million in third-quarter 2018. Higher production volumes of the Boeing 787 and Airbus A350 programs in addition to higher revenues generated from the Boeing 787 program drove the top line.

Propulsion Systems: The segment recorded revenues of $520.9 million in the reported quarter, up 17.7% from $442.4 million a year ago. The uptick can be attributed to a favorable model mix in the Boeing 737 program and higher production volumes of the Boeing 777 program.

Wing Systems: Revenues at the segment rose 3.3% to $391 million from $378.6 million in the prior-year quarter, primarily driven by higher production volumes of the Boeing 777 and 787 programs.

Spirit Aerosystems Holdings, Inc. Price, Consensus and EPS Surprise

Spirit Aerosystems Holdings, Inc. Price, Consensus and EPS Surprise

Spirit Aerosystems Holdings, Inc. price-consensus-eps-surprise-chart | Spirit Aerosystems Holdings, Inc. Quote

Financial Position

As of Sep 26, 2019, Spirit AeroSystems had $1,477.3 million in cash and cash equivalents compared with $773.6 million as of Dec 31, 2018.

As of Sep 26, 2019, long-term debt totaled $2,132.2 million compared with $1,864 million at the end of 2018.

Cash flow from operating activities increased to $718.6 million at the end of third-quarter 2019 from $567.4 million at the end of third-quarter 2018.

Capital expenditures summed $41 million during the third quarter, down from $62 million in the prior-year quarter.

Update on 737 MAX

Spirit AeroSystems continues to produce at a rate of 52 aircraft per month, per its agreement with Boeing.

Zacks Rank

Spirit AeroSystems has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Lockheed Martin Corp. LMT reported third-quarter 2019 earnings of $5.66 per share, which surpassed the Zacks Consensus Estimate of $5.03 by 12.5%. The bottom line also improved 10.1% from $5.14 in the year-ago quarter.

Textron Inc. TXT reported third-quarter 2019 earnings from continuing operations of 95 cents per share, which surpassed the Zacks Consensus Estimate of 85 cents by 11.8%. The bottom line increased 55.7% from the year-ago quarter.

General Dynamics Corporation GD reported third-quarter 2019 earnings from continuing operations of $3.14 per share, which beat the Zacks Consensus Estimate of $3.06 by 2.6%. The bottom line also improved 10.2% from the prior-year quarter’s $2.85.

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