Spirit AeroSystems (SPR) Q2 2024 earnings summary

Executive summary

• Net revenue for Q2 2024 increased 9% year-over-year to $1.49 billion, driven by higher production on most commercial and defense programs, despite a decrease in total shipset deliveries due to Boeing 737 delivery delays.

• Operating loss widened to $331.3 million in Q2 2024 from $120.4 million in Q2 2023, primarily due to higher unfavorable changes in estimates and forward loss charges.

• Net loss attributable to common shareholders was $415.3 million for Q2 2024, with diluted loss per share of $3.56, reflecting delivery delays, forward losses, and unfavorable cost adjustments.

• Spirit entered into a merger agreement with Boeing on June 30, 2024, with closing expected in mid-2025, subject to regulatory and shareholder approvals and divestiture of Airbus-related business.

• Liquidity remains challenged, with $206 million in cash at quarter-end, down from $823.5 million at year-end 2023, and significant reliance on customer advances and new bridge financing.

Financial highlights

• Q2 2024 net revenues: $1.49 billion, up from $1.36 billion in Q2 2023; six-month revenues: $3.19 billion, up from $2.80 billion year-over-year.

• Q2 2024 operating loss: $331.3 million (Q2 2023: $120.4 million); six-month operating loss: $858.9 million (2023: $215.5 million).

• Q2 2024 net loss: $415.3 million (Q2 2023: $206.3 million); six-month net loss: $1.03 billion (2023: $487.5 million).

• Cash used in operating activities for the first half of 2024 was $981.1 million, up from $229.0 million in the prior year period.

• Backlog remained strong at approximately $48 billion.

Outlook and guidance

• Management expects liquidity plans, including customer advances and operational restructuring, to support operations for at least the next twelve months, but outlook depends on achieving forecasted B737 deliveries and pricing adjustments on loss-making programs.

• The merger with Boeing is expected to close in mid-2025, contingent on regulatory approvals and the divestiture of Airbus-related business.

• Ongoing negotiations with Airbus on A220 and A350 pricing remain unresolved, creating uncertainty in future cash flows.