Spirit Aero delays 2024 forecast on MAX production cap, Airbus talks By Reuters

By Abhijith Ganapavaram

(Reuters) -Spirit AeroSystems held off providing a forecast for 2024 on Tuesday, citing uncertainty on the timing of 737 MAX production increases at Boeing (NYSE:) and ongoing price negotiations with Airbus that will focus on the A220 program.

The move follows a similar announcement from Boeing last week on its 2024 forecast and comes as the companies face scrutiny from investors, regulators and lawmakers following the mid-air blowout on a 737 MAX 9 aircraft last month.

“Speaking on behalf of everyone at Spirit, the quality and safety of the products we produce is paramount above all,” Interim CEO Patrick Shanahan said in a statement.

Spirit, which made the fuselage for the aircraft in question, has put in place additional inspections for its 737 fuselage production.

There were no serious injuries, but the accident prompted the U.S. Federal Aviation Administration (FAA) to bar Boeing, Spirit’s biggest customer, from lifting production of 737 MAX, without estimating how long the limitation will last.

For the quarter, Spirit reported a free cash flow of $42 million due to a $100 million funding received from Boeing, but that fell short of analysts’ expectation of $122.35 million, as per LSEG data.

The company’s shares dipped about 2% premarket. The stock is down about 16% since the mid-air blowout in early January.

Spirit, which struggled with a series of separate quality issues last year, had said it expects to generate free cash in 2024 following years of cash burn on cost overruns and supply jams.

Under an agreement reached in October to alleviate soaring costs, Boeing agreed to provide Spirit Aero immediate funding and revised prices for 737 and 787 production.

This helped Spirit reverse some forward losses of $34.3 million during the quarter through December but it recorded losses on the Airbus A350 program of $76.0 million and Airbus A220 program of $57.7 million.

Shanahan, a former U.S. deputy secretary of defense, has stressed the need for a Boeing type-agreement with Airbus that relieves those cost pressures, primarily on the single-aisle A220 program.

“We have no comment on the content of our confidential talks with suppliers,” Airbus said on Tuesday.

Wichita, Kansas-based Spirit reported an adjusted profit per share of 48 cents for the quarter, compared to a loss per share of $1.46 a year earlier.

Revenue rose 37% to $1.81 billion due to higher parts deliveries on both Boeing and Airbus commercial jet programs.

Spirit delivered 104 737 fuselages to Boeing in the quarter, averaging 34.66 per month. The planemaker said last week it was producing 38 737 jets per month.