Spirit AeroSystems' profit jumps in second quarter

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WICHITA, Kan. (WBJ) -

Spirit AeroSystems Inc. beat Wall Street expectations for both revenue and earnings per share in the second quarter on its way to posting a 16-percent increase in profit. 

Spirit (NYSE: SPR) on Wednesday morning reported revenues of $2.02 billion in the second quarter, up 10 percent year over year and topping analyst expectations of $1.98 billion. 

Meanwhile, the increase in net income, which rose to $168 million, translated to adjusted earnings per share of $1.71. That was up 3 percent year over year and topped expectations of $1.64.

Analysts had expected gains from Spirit in the second quarter despite the grounding of the Boeing Co.’s 737 MAX, which accounts for nearly 50 percent of its annual revenue. 

That’s because of the staggered production agreement Spirit has with Boeing (NYSE: BA), which has it continuing to build at the pre-grounding rate of 52 aircraft per month on the 737 and — most importantly for its bottom line — still being paid for the work in excess of Boeing’s own lowered output of 42 a month.

Boeing last week reported a second-quarter loss of $2.9 billion due to the MAX, which has been grounded since March following two deadly crashes of the jet.

Spirit builds around 70 percent of the structure of the aircraft in Wichita.

Company CEO Tom Gentile noted in a news release some of the cost cutting measures the company has had to take in relation to not yet having moved to 57 per month on the 737 as planned, but said those actions would not be realized in the financials till the second half of the year. 

Those measures have included a hiring freeze, reduced overtime and shortened work schedules and reduced pay for around 6,000 of its salaried workers in Wichita and Oklahoma. 

Spirit’s backlog was $46 billion at the end of the second quarter, orders that tie it to all the commercial aircraft in Boeing and Airbus’ product portfolios.  

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