Spirit AeroSystems, the troubled Boeing supplier which builds fuselages and other parts for the company, reported its first adjusted quarterly profit since the start of 2022, helped by increased payments from Boeing.
But the continued quality and safety problems at Boeing, and at Spirit AeroSystems, caused the supplier to announce it would not give any outlook for profits the rest of the year.
Still the return to profitability was a rare piece of good news for the company, which has been at the the center of the latest issues involving Boeing jets.
Spirit made the fuselage for the Alaksa Airlines 737 Max 9 jet that had a door plug blow off the plane on a January 5 flight, causing a gaping hole in the side of the plane minutes into the trip. While the plane was able to land without any fatalities, examination of all the Max 9 jets in service discovered loose bolts on a number of planes, which is believed to have been the cause of the problem on the Alaska aircraft.
Boeing announced on Sunday that Spirit AeroSystem workers disclosed there were misdrilled holes on 737 Max fuselages the company had built. The problem will force Boeing to re-work 50 of the jets before they are delivered, and further slow its production of the troubled jet.
Boeing had planned to increase production of the 737 Max this year, but those plans have been put on hold by the Federal Aviation Administration as it examines the problems at both Boeing and Spirit AeroSystems. Because of that, Spirit AeroSystems said Tuesday it will not give guidance on 2024 results until it gets more details on Boeing’s production plans, and it completes pricing negotiations with Airbus, another customer.
In October, Spirit AeroSystems reached an agreement with Boeing in which it agreed to pay Spirit $455 million in additional payments between then and 2025, in addition to at least $100 million to pay for additional tooling it needed. Boeing and Spirit described the agreement as a way to have “improved quality and higher deliveries in the future” from Spirit.
Because of that agreement, Spirit reported net income of $59 million for the quarter, a large improvement from the net loss of $243 million a year earlier. The adjusted profit of 48 cents a share was the first adjusted income since the first quarter of 2022.
It still left Spirit with a net loss for the year of $633 million, but it was the best quarterly result for the supplier since 2019. Spirit has reported net losses every quarter since the start of the pandemic in early 2020. The pandemic caused a massive slowdown in jet demand from airlines worldwide, and caused Boeing to temporarily halt production of the 737 Max, which it had continued to build during a 20-month grounding of the jet following two fatal crashes.
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