UPDATE 1-Spirit AeroSystems swings to loss on $448M charge

Mon Aug 12, 2013 11:25pm EDT
 
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By Alwyn Scott

Aug 12 (Reuters) - Spirit AeroSystems Holdings Inc, a key supplier of aircraft components to Boeing, Airbus and other plane makers, said its earnings swung to a loss in the latest quarter due to $448 million in cost overruns on several aircraft wing programs.

The big earnings surprise was flagged last week, when the company warned it would take a pretax charge of $350 million to $400 million and confirmed it was putting its troubled wing-construction facilities in Oklahoma up for sale.

Spirit shares rose 96 cents to $25.60 in after-hours trading following the news, but closed down 1.2 percent at $24.64 in regulator trading in New York.

The latest hit comes on top of $590 million in cost-overrun charges last October, bringing total writedowns in the past year to more than $1 billion.

The company still faces questions about its ability to make a profit from its Airbus A350 contract to make the center fuselage section and major wing parts for the latest Airbus jet.

Since most of Spirit's development programs have had significantly higher costs than expected, the A350 "is still the shoe that has to drop," said Peter Arment, an aerospace analyst at Sterne Agee brokerage firm in New York.

Analysts said the Oklahoma sale would remove the cost overhang that has hammered earnings, including the charges that hit results last year. But Spirit's employees might not accept a change in the business and the Oklahoma unit could be difficult to sell at a decent price.   Continued...