© Reuters. A Boeing 737 MAX-10 lands over the Spirit AeroMethods brand throughout a flying show on the 54th International Paris Air Show at Le Bourget Airport close to Paris, France, June 22, 2023. REUTERS/Benoit Tessier/File Photo
By Abhijith Ganapavaram
(Reuters) -Spirit AeroMethods held off offering a forecast for 2024 on Tuesday, citing uncertainty on the timing of 737 MAX manufacturing will increase at Boeing (NYSE:) and ongoing worth negotiations with Airbus that can concentrate on the A220 program.
The transfer follows an identical announcement from Boeing final week on its 2024 forecast and comes as the businesses face scrutiny from traders, regulators and lawmakers following the mid-air blowout on a 737 MAX 9 plane final month.
“Speaking on behalf of everyone at Spirit, the quality and safety of the products we produce is paramount above all,” Interim CEO Patrick Shanahan said in a statement.
Spirit, which made the fuselage for the aircraft in question, has put in place additional inspections for its 737 fuselage production.
There were no serious injuries, but the accident prompted the U.S. Federal Aviation Administration (FAA) to bar Boeing, Spirit’s biggest customer, from lifting production of 737 MAX, without estimating how long the limitation will last.
For the quarter, Spirit reported a free cash flow of $42 million due to a $100 million funding received from Boeing, but that fell short of analysts’ expectation of $122.35 million, as per LSEG data.
The company’s shares dipped about 2% premarket. The stock is down about 16% since the mid-air blowout in early January.
Spirit, which struggled with a series of separate quality issues last year, had said it expects to generate free cash in 2024 following years of cash burn on cost overruns and supply jams.
Under an agreement reached in October to alleviate soaring costs, Boeing agreed to provide Spirit Aero immediate funding and revised prices for 737 and 787 production.
This helped Spirit reverse some forward losses of $34.3 million during the quarter through December but it recorded losses on the Airbus A350 program of $76.0 million and Airbus A220 program of $57.7 million.
Shanahan, a former U.S. deputy secretary of defense, has stressed the need for a Boeing type-agreement with Airbus that relieves those cost pressures, primarily on the single-aisle A220 program.
“We don’t have any touch upon the content material of our confidential talks with suppliers,” Airbus mentioned on Tuesday.
Wichita, Kansas-based Spirit reported an adjusted revenue per share of 48 cents for the quarter, in comparison with a loss per share of $1.46 a yr earlier.
Revenue rose 37% to $1.81 billion as a consequence of increased elements deliveries on each Boeing and Airbus business jet applications.
Spirit delivered 104 737 fuselages to Boeing within the quarter, averaging 34.66 per thirty days. The planemaker mentioned final week it was producing 38 737 jets per thirty days.