Spirit AeroSystems Holdings, Inc. (SPR) Bundle
A Brief History of Spirit AeroSystems Holdings, Inc.
Spirit AeroSystems Holdings, Inc. (NYSE: SPR) has a significant position in the aerospace manufacturing sector, primarily focusing on the design and production of aerostructures for commercial and military aircraft. As of 2024, the company is navigating a complex landscape characterized by operational challenges and strategic changes.
Recent Financial Performance
For the third quarter of 2024, Spirit reported net revenues of $1.471 billion, reflecting a 2% increase from $1.439 billion in the same period of 2023. However, the operating loss increased to $350 million from $134 million year-over-year, representing an operating loss margin of 23.8% compared to 9.3% in Q3 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenues | $1,471 million | $1,439 million | 2% |
| Operating Loss | ($350 million) | ($134 million) | |
| Net Loss | ($477 million) | ($204 million) | |
| Loss Per Share (Diluted) | ($4.07) | ($1.94) |
The total net loss for the nine months ending September 26, 2024, was $1.509 billion, which increased from $692 million in the same period of the previous year. The loss per share for the nine-month period was $12.93, compared to $6.58 in 2023.
Operational Challenges
Spirit's operational difficulties have been exacerbated by delays in Boeing 737 deliveries and rising production costs. The company recognized net forward losses of $217 million in Q3 2024, primarily driven by challenges in the Boeing 787 and Airbus A220 programs. The unfavorable cumulative catch-up adjustments accounted for additional costs, particularly in the Boeing 737 and 777 programs.
Cash Flow and Debt Position
As of the end of Q3 2024, Spirit's cash balance stood at $218 million, a significant decrease from $824 million at the end of 2023. The total debt increased to $4.403 billion from $4.084 billion in the same period. Cash used in operations during the quarter was $276 million, with free cash flow usage amounting to $323 million.
| Cash Flow Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Cash Used in Operations | ($276 million) | ($111 million) | |
| Free Cash Flow | ($323 million) | ($136 million) | |
| Cash Balance | $218 million | $824 million | (73.5%) |
| Total Debt | $4.403 billion | $4.084 billion | 7.8% |
Merger with Boeing
In June 2024, Spirit entered a merger agreement with The Boeing Company. The merger is expected to close in mid-2025, subject to regulatory approvals and the divestiture of certain business segments. This strategic move is anticipated to reshape Spirit's operational capacity and market position within the aerospace sector.
Segment Performance
Spirit's revenue streams are categorized into three primary segments: Commercial, Defense & Space, and Aftermarket. In Q3 2024, the Commercial segment generated revenues of $1.140 billion, a slight increase over the previous year, while the Defense & Space segment saw a growth of 12.4% to $231.3 million.
| Segment Performance | Q3 2024 Revenue | Q3 2023 Revenue | Change (%) |
|---|---|---|---|
| Commercial | $1,139.8 million | $1,136.4 million | 0.3% |
| Defense & Space | $231.3 million | $205.7 million | 12.4% |
| Aftermarket | $99.5 million | $96.8 million | 2.8% |
Spirit AeroSystems continues to adapt to the evolving aerospace landscape, with a focus on improving operational efficiency and financial stability amidst ongoing challenges.
A Who Owns Spirit AeroSystems Holdings, Inc. (SPR)
Ownership Structure
As of 2024, Spirit AeroSystems Holdings, Inc. (NYSE: SPR) is primarily owned by institutional investors, with significant ownership stakes held by various asset management firms and mutual funds. The most recent data indicates that the company's largest shareholders include:
| Shareholder | Ownership Percentage | Shares Owned |
|---|---|---|
| The Vanguard Group, Inc. | 12.5% | 14.6 million |
| BlackRock, Inc. | 10.2% | 11.9 million |
| State Street Corporation | 8.8% | 10.3 million |
| Wellington Management Company, LLP | 7.5% | 8.8 million |
| Invesco Ltd. | 5.4% | 6.4 million |
Recent Developments and Acquisition Plans
On June 30, 2024, Spirit AeroSystems announced a merger agreement with The Boeing Company. This acquisition is expected to close in mid-2025, making Spirit a wholly-owned subsidiary of Boeing. The merger is subject to regulatory approvals and shareholder consent. As part of the agreement, Boeing has agreed to provide financial support, which includes an advance of $425 million.
Market Capitalization and Financial Performance
As of the end of the third quarter of 2024, Spirit AeroSystems reported a market capitalization of approximately $1.5 billion. The financial performance for the third quarter of 2024 indicated:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Revenues | $1.471 billion | $1.439 billion |
| Operating Loss | ($350 million) | ($134 million) |
| Net Loss | ($477 million) | ($204 million) |
| Loss Per Share (Fully Diluted) | ($4.07) | ($1.94) |
Institutional Ownership Trends
Institutional ownership has been a critical factor in Spirit AeroSystems' stock performance. As of the latest reports, approximately 85% of Spirit's shares are held by institutional investors. The recent acquisition plans have further influenced investor sentiment and institutional interest in the stock.
Shareholder Voting Rights
As a publicly traded company, shareholders of Spirit AeroSystems have the right to vote on key issues, including the proposed merger with Boeing. Shareholder meetings are held annually, and significant votes are conducted to determine the direction of the company, particularly in the context of mergers and acquisitions.
Conclusion of Ownership Analysis
Spirit AeroSystems' ownership structure is characterized by substantial institutional holdings, with major players like Vanguard and BlackRock being significant stakeholders. The upcoming merger with Boeing is poised to reshape the ownership landscape and strategic direction of the company as it transitions into a wholly-owned subsidiary.
Spirit AeroSystems Holdings, Inc. (SPR) Mission Statement
The mission statement of Spirit AeroSystems Holdings, Inc. focuses on delivering innovative aerospace solutions and services while maintaining a commitment to safety, quality, and operational excellence. The company aims to provide world-class products that meet the needs of its customers in the commercial and defense aerospace sectors.
Financial Overview
As of the third quarter of 2024, Spirit AeroSystems reported the following financial results:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenues | $1,471 million | $1,439 million | 2% |
| Operating Loss | $(350) million | $(134) million | |
| Net Loss | $(477) million | $(204) million | |
| Loss Per Share (Fully Diluted) | $(4.07) | $(1.94) | |
| Cash Used in Operations | $(276) million | $(111) million | |
| Free Cash Flow | $(323) million | $(136) million |
The company’s backlog at the end of Q3 2024 was approximately $48 billion, which includes work packages on all commercial platforms in the Airbus and Boeing backlog.
Segment Performance
Spirit AeroSystems operates in three primary segments: Commercial, Defense & Space, and Aftermarket. Below is a summary of segment revenues:
| Segment | Q3 2024 Revenue ($ million) | Q3 2023 Revenue ($ million) | Change (%) |
|---|---|---|---|
| Commercial | $1,139.8 | $1,136.4 | 0.3% |
| Defense & Space | $231.3 | $205.7 | 12.4% |
| Aftermarket | $99.5 | $96.8 | 2.8% |
| Total Segment Revenues | $1,470.6 | $1,438.9 | 2.2% |
Operating losses across segments were notable, especially in the Commercial sector, which reported significant losses due to various cost escalations and supply chain challenges.
Operational Challenges
Spirit AeroSystems faced several operational challenges in 2024, including:
- Increased production costs related to the Boeing 787 and Airbus A220 programs, resulting in net forward losses of $109 million and $64 million, respectively.
- Excess capacity costs of $70 million in Q3 2024.
- Impact of the Boeing IAM strike, leading to employee furloughs and potential layoffs if conditions do not improve.
Liquidity and Financial Position
As of September 26, 2024, Spirit AeroSystems reported the following liquidity metrics:
| Liquidity Metric | Amount ($ million) |
|---|---|
| Cash | $218 |
| Total Debt | $4,403 |
| Net Loss YTD | $(1,509) |
| Adjusted Loss Per Share (Fully Diluted) | $(3.03) |
The company’s cash position has significantly declined from $824 million at the end of 2023, reflecting ongoing operational expenditures and losses.
Future Outlook
Spirit AeroSystems is currently navigating significant changes due to its pending merger with The Boeing Company, which is expected to close in mid-2025. This merger aims to enhance operational efficiencies and market positioning within the aerospace sector.
How Spirit AeroSystems Holdings, Inc. (SPR) Works
Financial Overview
As of the third quarter of 2024, Spirit AeroSystems reported net revenues of $1.471 billion, an increase of 2% from $1.439 billion in the same period of 2023. For the nine months ended September 26, 2024, the company achieved revenues of $4.665 billion, up 10% from $4.235 billion in 2023.
| Metric | Q3 2024 | Q3 2023 | Change | YTD 2024 | YTD 2023 | Change |
|---|---|---|---|---|---|---|
| Net Revenues | $1,471 million | $1,439 million | 2% | $4,665 million | $4,235 million | 10% |
| Operating Loss | ($350) million | ($134) million | - | ($1,209) million | ($349) million | - |
| Net Loss | ($477) million | ($204) million | - | ($1,509) million | ($692) million | - |
| Loss Per Share (Fully Diluted) | ($4.07) | ($1.94) | - | ($12.93) | ($6.58) | 97% |
Segment Performance
Spirit AeroSystems operates across several segments including Commercial, Defense & Space, and Aftermarket. The following table summarizes segment revenues and operating losses for Q3 2024 and the corresponding period in 2023.
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Change | Q3 2024 Operating Loss | Q3 2023 Operating Loss | Change |
|---|---|---|---|---|---|---|
| Commercial | $1,139.8 million | $1,136.4 million | 0.3% | ($299.4 million) | ($82.1 million) | - |
| Defense & Space | $231.3 million | $205.7 million | 12.4% | $44.8 million | $9.8 million | - |
| Aftermarket | $99.5 million | $96.8 million | 2.8% | $8.7 million | $17.9 million | - |
Cash Flow and Debt Management
In Q3 2024, Spirit AeroSystems reported cash used in operations of ($276 million) and free cash flow usage of ($323 million). The cash balance at the end of the quarter was $218 million, down from $824 million at the end of 2023. Total debt as of September 26, 2024, stood at $4.403 billion, compared to $4.084 billion at the end of 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Cash Used in Operations | ($276 million) | ($111 million) |
| Free Cash Flow | ($323 million) | ($136 million) |
| Cash Balance | $218 million | $824 million |
| Total Debt | $4.403 billion | $4.084 billion |
Backlog and Future Outlook
As of the end of Q3 2024, Spirit AeroSystems' backlog was approximately $48 billion, encompassing work packages across all commercial platforms in the Airbus and Boeing backlog. The company is navigating challenges related to production delays and labor costs, particularly concerning the Boeing 737 program. The expected merger with Boeing is anticipated to conclude in mid-2025, pending regulatory approvals.
Impact of Labor Relations
As of October 18, 2024, Spirit AeroSystems initiated employee furloughs and cost-saving measures due to the ongoing strike by Boeing employees, affecting operations related to the 767 and 777 programs. Approximately 700 employees are subject to a 21-day furlough, with potential for further layoffs if the strike continues.
Operational Metrics
Overall deliveries in Q3 2024 remained consistent with 332 shipsets delivered, the same as in Q3 2023. The breakdown of deliveries for Boeing and Airbus is as follows:
| Aircraft Type | Q3 2024 Deliveries | Q3 2023 Deliveries |
|---|---|---|
| Boeing 737 | 64 | 83 |
| Boeing 767 | 6 | 7 |
| Boeing 777 | 9 | 9 |
| Boeing 787 | 9 | 9 |
| A220 | 19 | 16 |
| A320 Family | 135 | 129 |
| A330 | 11 | 8 |
| A350 | 13 | 12 |
| Total Airbus | 178 | 165 |
| Total Deliveries | 332 | 332 |
How Spirit AeroSystems Holdings, Inc. (SPR) Makes Money
Revenue Sources
Spirit AeroSystems Holdings, Inc. generates revenue primarily through three segments: Commercial, Defense & Space, and Aftermarket services. As of the third quarter of 2024, the breakdown of revenues was as follows:
| Segment | Q3 2024 Revenue ($ millions) | Q3 2023 Revenue ($ millions) | Change (%) |
|---|---|---|---|
| Commercial | 1,139.8 | 1,136.4 | 0.3 |
| Defense & Space | 231.3 | 205.7 | 12.4 |
| Aftermarket | 99.5 | 96.8 | 2.8 |
| Total Segment Revenue | 1,470.6 | 1,438.9 | 2.2 |
The total revenue for the nine months ended September 26, 2024, was $4,665.3 million, reflecting a 10.2% increase from $4,235.0 million in the same period of 2023.
Commercial Segment Performance
The Commercial segment is the largest revenue contributor, primarily driven by aircraft assembly and component manufacturing for major clients like Boeing and Airbus. In Q3 2024, the segment reported an operating loss of $299.4 million, compared to a loss of $82.1 million in Q3 2023. This loss was attributed to:
- Net forward losses of $213 million.
- Unfavorable cumulative catch-up adjustments of $38 million.
- Excess capacity costs of $66 million.
Defense & Space Segment Performance
The Defense & Space segment showed resilience with a revenue increase of 12.4%. In Q3 2024, the operating earnings increased to $44.8 million from $9.8 million in Q3 2023, supported by:
- Higher activity on the Sikorsky CH-53K program.
- Non-recurring revenue from the FLRAA program closeout.
- Favorable cumulative adjustments of $12 million.
Aftermarket Segment Performance
The Aftermarket segment's revenue slightly increased by 2.8% in Q3 2024, reaching $99.5 million. However, the operating margin decreased due to a changing sales mix.
Financial Overview
As of September 26, 2024, Spirit AeroSystems reported:
| Financial Metrics | Q3 2024 ($ millions) | Q3 2023 ($ millions) | Change (%) |
|---|---|---|---|
| Net Revenues | 1,471 | 1,439 | 2 |
| Operating Loss | (350) | (134) | |
| Net Loss | (477) | (204) | |
| Loss Per Share (Fully Diluted) | $(4.07) | $(1.94) | |
| Cash Used in Operations | (276) | (111) | |
| Free Cash Flow | (323) | (136) |
Spirit's total cash at the end of Q3 2024 was $218 million, down from $824 million at the end of 2023. The total debt stood at $4,403 million.
Backlog and Future Outlook
As of the end of Q3 2024, Spirit AeroSystems had a backlog of approximately $48 billion, which includes work packages for all commercial platforms in the Airbus and Boeing backlog. The company is also navigating challenges from the ongoing Boeing IAM strike, which may impact future production and financial stability.
Management is implementing strategies to improve liquidity, including potential new customer advances and restructuring efforts, as they prepare for a merger with Boeing anticipated to close in mid-2025.
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Article updated on 8 Nov 2024
Resources:
- Spirit AeroSystems Holdings, Inc. (SPR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Spirit AeroSystems Holdings, Inc. (SPR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Spirit AeroSystems Holdings, Inc. (SPR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.