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Spirit AeroSystems (SPR) Q2 Earnings Miss, Revenues Down Y/Y

Spirit AeroSystems Holdings, Inc. SPR reported second-quarter 2020 adjusted loss of $2.28 per share, wider than the Zacks Consensus Estimates of a loss of $1.19. In the previous year’s second quarter, the company reported adjusted earnings of $1.71 per share.

Barring one-time adjustments, the company reported a GAAP loss of $2.46 per share against the earnings of $1.61 in the year-ago quarter.

Highlights of the Release

Total revenues of $644.6 million missed the Zacks Consensus Estimate of $806 million by 20%. Moreover, the top line plunged a massive 68% from $2,016 million in the year-ago period. The decline in revenues was primarily due to the significantly lower 737 MAX production, resulting from the grounding of the program, and the impacts of COVID-19.

Backlog at the end of second-quarter 2020 was $41 billion, lower than $42 billion in the prior quarter.

Segment Performance

Fuselage Systems: Revenues in the segment declined 70.2% to $327.1 million from $1,096.8 million registered in second-quarter 2019, primarily due to lower production volumes on the Boeing 737 and 787, and Airbus A350 programs.

Propulsion Systems: The segment recorded revenues of $169.6 million in the reported quarter, down 67.3% from $518.9 million a year ago. The downside can be attributed to lower production volumes on the Boeing 737 program.

Wing Systems: Revenues in the segment deteriorated 69.3% to $122.5 million from $398.5 million in the prior-year quarter. The downside was primarily due to lower production volumes on the Boeing 737 and Airbus A320 and A350 programs.

Operational Highlights

Total operating costs and expenses declined 43.5% year over year to $1,011.6 million on account of lower cost of sales; decreased selling, general and administrative expenses; and reduced research and development expenses.

The company incurred an operating loss of $367 million in the second quarter of 2020 against operating earnings of $226 million in the prior-year quarter.

Spirit Aerosystems Holdings, Inc. Price, Consensus and EPS Surprise

Spirit Aerosystems Holdings, Inc. Price, Consensus and EPS Surprise

Spirit Aerosystems Holdings, Inc. price-consensus-eps-surprise-chart | Spirit Aerosystems Holdings, Inc. Quote

Financial Position

As of Jul 2, 2020, Spirit AeroSystems had $1,947.1 million in cash and cash equivalents compared with $2,350.5 million as of Dec 31, 2019.

At the end of the first six months of 2020, long-term debt totaled $3,050.6 million compared with $2,984.1 million at the end of 2019.

Net cash used in operating activities increased to $559.7 million at the end of second-quarter 2020 against net cash inflow of $471.7 million at the end of second-quarter 2019.

Capital expenditures summed $20 million during the second quarter, down from $37 million in the prior-year quarter.

Zacks Rank

Spirit AeroSystems has a Zacks Rank #5 (Strong Sell).

Recent Defense Releases

Teledyne Technologies TDY, a Zacks Rank #2 (Buy) company, reported second-quarter 2020 adjusted earnings of $2.43 per share, which surpassed the Zacks Consensus Estimate of $2.01 by 20.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Lockheed Martin Corp. LMT, a Zacks Rank #3 (Hold) company, reported second-quarter 2020 adjusted earnings of $6.13 per share, which surpassed the Zacks Consensus Estimate of $5.71 by 7.4%.

Curtiss-Wright Corporation CW, a Zacks Rank #3 company, reported second-quarter 2020 adjusted earnings of $1.31 per share, which surpassed the Zacks Consensus Estimate of $1.29 by 1.6%.

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