Spirit AeroSystems Finalizes Fourth Quarter Results for 2024

Fourth Quarter Financial Overview

Spirit AeroSystems Holdings, Inc. (NYSE: SPR) has announced its financial results for the fourth quarter of 2024, highlighting revenues of $1.7 billion during this period. The net losses for the quarter were reported at $(5.38) per share, with an adjusted EPS of $(4.22). Despite increasing cash flow from operations, the company registered a free cash flow of $91 million.

Operational Progress

As the company prepares for its anticipated acquisition by Boeing, Spirit AeroSystems is focusing on optimizing its operations. Pat Shanahan, the President and Chief Executive Officer, stated, "We continue to make substantial progress across various areas of our operations. Our dedicated teams are meticulously crafting transition plans to ensure a seamless integration, while remaining committed to delivering consistent value for our customers and stakeholders."

Delivery Growth Metrics

In terms of operational successes, there was a notable increase in deliveries this quarter, particularly with the Boeing 737, which doubled from the previous quarter. The A220 and A350 deliveries saw increases of 37% and 15%, respectively. These enhancements are attributed to the initial stages of process improvements within the company.

Revenue and Backlog Analysis

However, Spirit's overall revenues saw a decrease compared to the same period last year principally due to the implications of the Memorandum of Agreement with Boeing from late 2023. The fourth quarter of 2024 experienced increased defense and space revenues, which helped mitigate revenue declines. Closing the quarter, Spirit AeroSystems held an impressive backlog of approximately $47 billion, confirming its ongoing confidence in demand across commercial platforms.

Earnings Summary

In stark contrast to the operating income from the previous year, Spirit recorded an operating loss in Q4 of 2024. Factors contributing to this fluctuation include hefty forward losses amounting to $440 million largely influenced by challenges facing projects like the Boeing 787 and Airbus A220. Additionally, excess capacity costs in this quarter amounted to $54 million. Comparatively, the previous year's fourth quarter saw favorable operating income supported by the agreement with Boeing in October 2023.

Insights on Losses

EPS for the fourth quarter was noted at $(5.38), a significant drop from the earning of $0.66 from the previous year. Adjusted EPS also showcased a decline, revealing the financial challenges the company is navigating as it works through various operational and market conditions.

Cash Flow Improvements

Spirit AeroSystems saw improvements in cash from operations—amounting to $137 million this quarter. The infusion of cash was largely driven by the earlier referenced uptick in Boeing 737 deliveries and effective management of working capital. Moreover, the company secured substantial agreements with key customers like Boeing and Airbus, securing vital financial support through advance payments and lines of credit.

Plans for Continued Liquidity

In light of the current financial landscape, Spirit has crafted a strategic plan to enhance liquidity. This includes active discussions with customers regarding the repayment timelines for advances, adjustments in operational strategies, production forecasts for Boeing 737s, and the anticipated proceeds from upcoming divestitures. Much depends on the outcomes from the merger discussions with Boeing, emphasizing the importance of these plans for future stability.

Update on Boeing Acquisition

On June 30, 2024, Spirit AeroSystems entered into a Merger Agreement with The Boeing Company. Subject to the agreement's conditions, Spirit is expected to become a wholly owned subsidiary of Boeing by mid-2025. The anticipated transaction includes fulfilling various divestiture requirements and securing regulatory approvals, which are crucial for completing this significant merger.

Recent Developments and Operational Changes

Recent activities have included agreements for strategic acquisitions and divestitures that are expected to have positive implications for future operations. For instance, Spirit and Fiber Materials, Inc. have undertaken agreements that are set to bolster the company’s market positioning. These operational changes align with Spirit's commitment to restructuring for greater efficiency and improved financial health.

Outlook for 2024

As the merger between Spirit AeroSystems and Boeing is poised to alter the landscape of both companies, 2024 guidance will not be explicitly provided. Nonetheless, the company remains focused on aligning its operational capabilities to adapt to future market demands while optimizing returns for shareholders. Full financial results and analyses will be disclosed in the upcoming Annual Report.

Frequently Asked Questions

What were Spirit AeroSystems' revenues in the fourth quarter of 2024?

Spirit AeroSystems reported revenues of $1.7 billion for the fourth quarter of 2024.

How did the company's EPS change compared to the previous year?

The EPS for the fourth quarter of 2024 was $(5.38), a significant decline from $0.66 in the prior year.

What operational improvements did Spirit AeroSystems achieve?

Increased delivery numbers were reported for Boeing 737, A220, and A350 aircraft, with particularly significant increases for the 737.

What is the current financial outlook for Spirit?

With the acquisition process ongoing, Spirit will refrain from providing specific guidance for 2024, focusing instead on operational alignment and efficiency.

What is the status of the merger with Boeing?

The merger with The Boeing Company is set to finalize by mid-2025, pending necessary regulatory approvals and divestiture conditions.

About The Author

Hi there, I'm Hannah Lewis, a writer and financial specialist of 36 years old committed to making money understandable and approachable to everyone. Years of working in the field have given me a thorough grasp of market trends, investment techniques, and economic fundamentals. My objective is to enable people, by means of understandable, useful guidance, to take charge of their financial destiny.

I have written many articles for financial blogs over my career that simplify difficult financial ideas into understandable insights. Being financially literate is a critical ability, and I am passionate about enabling people to confidently manage their financial lives. Regardless of your level of experience, my work will help you at every stage of the investment process. I appreciate being allowed to share in your success and financial expansion.

Contact Hannah Lewis privately here. Or send an email with ATTN: Hannah Lewis as the subject to contact@investorshangout.com.

About Investors Hangout

Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/

The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.