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Spirit AeroSystems (SPR) Q2 Earnings Beat, Revenues Lag

Zacks Equity Research
Updated

Spirit AeroSystems Holdings, Inc. SPR reported second-quarter 2018 adjusted earnings of $1.63 per share, which surpassed the Zacks Consensus Estimate of $1.51 by 7.9%. The bottom line also came higher than the year-ago quarter’s figure of $1.57 by 4%.

Barring one-time adjustments, the company reported GAAP earnings of $1.31 per share against the loss of 48 cents incurred in the year-ago quarter.

Highlights of the Release

Total sales of $1,837 million in the second quarter missed the Zacks Consensus Estimate of $1,855 million by 1%. However, the top line rose 1% on a year-over-year basis.

Backlog at the end of second-quarter 2018 was $47 billion, flat with the prior-quarter’s figure.

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

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

Segment Performance

Fuselage Systems: Revenues at the segment grew 9.8% to $1,029.7 million from $938.2 million in second quarter 2017. Higher production deliveries of the Boeing 737 jets as well as increased defense work drove the top line.

Propulsion Systems: The segment recorded revenues of $422.7 million in the quarter, down 3.2% from $436.5 million a year ago. The decrease can be attributed to lower production deliveries on the Boeing 777 program as well as lower revenues realized from the Boeing 787 program due to adoption of ASC 606.

Wing Systems: Revenues at the segment decreased 15% to $383 million from $450.5 million in the prior-year quarter. The downside was due to lower revenue realized from the Boeing 787 program, Airbus A350 XWB and the impact of foreign currency fluctuations on the Airbus A320 program.

Financial Position

As of Jun 28, 2018, Spirit AeroSystems had $593 million in cash and cash equivalents compared with $423.3 as of Dec 31, 2017.

As of Jun 30, 2018, long-term debt (excluding current portion) totaled $1,858 million compared with $1,120 million at the end of 2017.

Cash flow from operating activities increased to $397.2 million at the end of second-quarter 2018 from $334 million at the end of second-quarter 2017.

Capital expenditures summed $61 million in the reported quarter compared with $47 million in the year-ago quarter.

Guidance

Spirit AeroSystems reiterated financial guidance for 2018. The company continues to expect earnings per share in the range of $6.25-$6.50 on revenues of $7.1-$7.2 billion.

Additionally, management continues to expect free cash flow in the $550-$600 million band for the current year.

Zacks Rank

Spirit AeroSystems currently has a Zacks Rank #4 (Sell).

Recent Defense Releases

Aerojet Rocketdyne Holdings, Inc. AJRD reported second-quarter 2018 earnings of 45 cents per share, which surpassed the Zacks Consensus Estimate of 26 cents by 73.1%. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Lockheed Martin’s LMT second-quarter 2018 adjusted earnings came in at $4.31 per share, outpacing the Zacks Consensus Estimate of $3.89 by 10.8%. The company carries a Zacks Rank #3 (Hold).

Textron TXT reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which exceeded the Zacks Consensus Estimate of 70 cents by 24.3%. The company carries a Zacks Rank #2 (Buy).

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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
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