Shares of Spirit AeroSystems Holdings Inc. seesawed to a gain Tuesday, after the aircraft-components maker reported a surprise fourth-quarter profit, but Chief Executive Pat Shanahan focused his comments on steps taken after the Jan. 5 incident on a Boeing 737 Max 9.
Shanahan said since the incident, the focus of the company
SPR,
has been on supporting Boeing Co.
BA,
its customers and regulators. Among Spirit’s actions immediately after the incident was to take “a hard look” at its processes and to add inspections to both Spirit’s and Boeing’s operations.
And he said Spirit has initiated a “second wave” of actions centered on addressing “human factors,” given that a significant portion of building the Boeing 737 fuselage is performed by humans.
“Repeatability, reliability and capability and manufacturing is required to produce high quality, conforming products,” Shanahan said, according to a FactSet transcript of the post-earnings conference call with analysts. “The human condition and human factors must be accounted for in any improvement efforts.”
He said among the actions Spirit is taking to “mitigate” human factors is more testing and training and to provide employees with better tools and technology.
Spirit’s stock traded down as much as 4.5%, then rallied as much as 5.7% in intraday trading through the morning, before being up 1.1% in midday trading. It has shed 14.1% since the Jan. 5 incident.
Before the opening bell, the company said it swung to fourth-quarter net income of $58.7 million, or 52 cents a share, from a net loss of $243.1 million, or $2.32 a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings-per-share of 48 cents compared with the FactSet consensus for a per-share loss of 35 cents.
Bottom-line results for the latest quarter included a $205.6 million loss reversal resulting from an October memorandum of agreement (MOA) with Boeing Co.
BA,
on price adjustments for the Boeing 787 program and the reversal of a potential claim related to the Boeing 737 vertical-fin-attach fittings issue.
Revenue ran up 37.3% to $1.81 billion, above the FactSet consensus of $1.74 billion, as commercial revenue rose 42.6% and defense and space revenue grew 12.1%.
Deliveries increased 16% to 398 shipsets, including a 28% jump in Boeing 737 deliveries to 104 shipsets.
The company said it would not provide forward guidance for 2024, “until there is further clarity” on the timing of Boeing 737 Max production rate increases, as well as on current price negotiations with Boeing’s rival Airbus SE
AIR,
Spirit’s stock has tumbled 14.2% year to date, given its part in the inflight blowout of a panel that led to groundings of 737 Max 9 aircraft. Meanwhile, Boeing’s stock has dropped 20.7% this year while the S&P 500
SPX,
has gained 3.6%.
