Spirit AeroSystems’ 2Q23 results are disappointing. The company posted a loss per share of -$1.46, substantially lower than the consensus estimate of -$0.71. Revenues were 5 percent ahead of consensus. The weakness was focused on the company’s commercial side, which saw a -6.7 percent margin.
Spirit also faces headwinds from rising labor costs. The short strike caused 25 fewer 737 MAX deliveries (we covered this issue earlier). Spirit completed vertical fin attach fitting rework on 737s in Wichita and estimates Boeing is ~50 percent through the entire re-work requirement. But the non-MAX 737 program (P-8A) saw good results, with sales up 30 percent.
Another large military program, the CH-53K, also saw a charge. But there were losses on the 787 ($37.5 million), A350 ($27.5 million), and A220 ($27.4 million) programs. Fortunately, the aftermarket spares business delivered a robust 26 percent margin. Overall, these results show widespread areas of concern. Analysts are down on the company before its earnings call later this morning.
Like the rest of the commercial aviation silo, rising labor costs will impact. Spirit faces $80 million higher annual labor charges. Spirit AeroSystems is the lynchpin for the two big OEMs. There’s a lot of risk on the table. Even though Boeing is more at risk, Dave Calhoun has clarified that Boeing is not a buyer.
Spirit AeroSystems is a critical part of the commercial aviation supply chain. Its wobbliness is unsettling for the commercial aviation silo.
