(Reuters) - Boeing-supplier Spirit AeroSystems (SPR.N) posted a lower-than-expected quarterly profit on Friday as it booked a loss related to the 787 Dreamliner program, and said its 2020 cash flow will be negative as it struggles with the 737 MAX production halt. Shares of Spirit, which makes the fuselage for the 737 MAX and engine pylons for the 787 Dreamliner, fell as much as 9% to a more than three-year low of $51.11 as the company also said it would not provide a 2020 outlook for profit and revenue until the 737 MAX jet was cleared to fly again. Spirit recorded a loss of about $34 million in the fourth quarter on Boeing’s move to lower the production of its larger and more profitable 787 wide-body aircraft to 10 jets per month in 2021 from 14 currently amid a drought of orders from China.
Spirit sales have also suffered after Boeing halted the production of its once best-selling 737 MAX, which was grounded in March following two deadly crashes. As a result, Spirit has cut 2,800 jobs and reduced its quarterly dividend by 90% to just 1 cent per share.
The company, which reached a deal with Boeing last month to deliver 216 737 MAX shipsets in 2020, said it plans to gradually restart production of the jet in March, ahead of a likely recertification of the plane by the middle of this year.
But Spirit Chief Executive Officer Tom Gentile warned that if the recertification gets delayed, Boeing could reduce the 216 shipsets target, affecting Spirit’s 2020 revenue and cash flow further.
“If things change...that (216 shipsets target) is not locked in stone,” Gentile said on a post-earnings call with analysts.
An accounting irregularity in its 2019 financial statements has added to the company’s headaches, as it replaced Chief Financial Officer Jose Garcia last month with former principal accounting officer Mark Suchinski.
Spirit said on Friday that although no restatement of its financial statements was required, it has concluded that a “material weakness” exists in its financial reporting and this would be fixed by the end of 2020.
Spirit’s net income fell to $68 million, or 65 cents per share, in the fourth quarter ended Dec. 31 from $178 million, or $1.68 per share, a year earlier.
On an adjusted basis, Spirit earned 79 cents per share, well below analysts’ average expectation of $1.65 per share, according to IBES data from Refinitiv.
Total revenue rose 6.8% to $1.96 billion.
Reporting by Ankit Ajmera in Bengaluru; Editing by Anil D'Silva and Shailesh Kuber