February 1, 2019 / 12:53 PM / 6 months ago

Spirit Aero signals strong 2019 on rising demand from Boeing

(Reuters) - Spirit AeroSystems Holdings Inc forecast 2019 profit and revenue above Wall Street estimates on Friday, as it prepares to meet higher demand for fuselages and other aircraft parts from top customer Boeing Co, sending its shares up as much as 5.2 percent.

Spirit expects revenue growth of about 14 percent in 2019, largely driven by Boeing’s 737, Chief Executive Officer Tom Gentile said on a post-earnings conference call with analysts.

“That’s our largest program (737) and it’s going up.” Spirit makes about 70 percent of Boeing’s best-selling commercial jetliner 737’s structure.

Gentile said Spirit would raise the production of the jet parts to 57 units a month this year from 52 last year.

Investors are closely watching Spirit’s ability to deliver orders from Boeing and Airbus SE as delays last year were at the heart of Spirit’s problems.

“As we begin 2019, our focus is on the efficient execution of production rate increases, margin expansion, continued growth in defense and fabrication,” Gentile said.

The company’s facilities in Wichita, Kansas, Tulsa and Oklahoma are operating at optimal level to increase production rates as it looks to keep pace with Boeing’s rising deliveries.

The world’s largest planemaker on Wednesday forecast deliveries of nearly 100 more planes in 2019, compared with a year earlier.

Spirit said it expects operating margins of 16.5 percent in 2019, up from 15 percent last year, as it prepares to raise production on aircraft programs, including 14 units a month on Boeing’s 787 Dreamliner and 60 aircraft a month on Airbus’ A320.

Spirit delivered 1,734 shipsets — the complete set of parts for each aircraft - in 2018, up from 1,651 a year earlier.

The company said it expects 2019 profit to be in the range of $7.35 to $7.60 per share and revenue between $8 billion and $8.2 billion.

Analysts on average had expected a profit of $7.34 per share and revenue of $7.64 billion for 2019, according to IBES data from Refinitiv.

Spirit hopes to close its $650 million deal to buy Europe’s Asco Industries NV in the first half of the year.

“This week we refiled our Form CO, which is the formal notification required for merger review and clearance by the European Commission,” Gentile said.

On an adjusted basis, the company earned $1.85 per share, above analysts’ expectations of $1.80 per share, according to IBES data from Refinitiv.

“Fourth quarter EPS beat shows Spirit is firmly back on track with 737 aerostructure deliveries and despite the elongated ASCO deal timing... Spirit’s EPS guidance was still ahead of our expectations at the mid-point,” Seaport Global analyst Josh Sullivan said.

Total revenue rose 7 percent to $1.84 billion, falling slightly below estimates of $1.85 billion.

Shares rose as much as 5.2 percent to $87.81 in afternoon trading.

Reporting by Rama Venkat and Sanjana Shivdas in Bengaluru; Editing by Anil D'Silva and Shinjini Ganguli

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below