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Spirit AeroSystems (SPR) Tops Q2 Earnings, Boosts Outlook

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Spirit AeroSystems Holdings, Inc. (SPR - Free Report) posted second-quarter 2016 adjusted earnings of $1.21 per share, beating the Zacks Consensus Estimate of $1.05 by 15.2%. Earnings were also higher than the year-ago figure of $1.09 by 11%.

On a GAAP basis, the company reported earnings of 35 cents per share in the reported quarter, compared with $1.11 per share in the prior-year quarter. The difference between operating and GAAP results was due to the impact of the Airbus agreement, CEO retirement, and debt refinancing.

SPIRIT AEROSYS Price, Consensus and EPS Surprise

SPIRIT AEROSYS Price, Consensus and EPS Surprise | SPIRIT AEROSYS Quote

Highlights of the Release

Total revenue of $1,829.9 million in the second quarter surpassed the Zacks Consensus Estimate of $1,660 million by 10.2%. Revenues also improved 7.7% year over year.

Backlog at the end of the quarter was $47 billion, registering a sequential increase of $1 billion.

Segment Performance

Fuselage Systems: Revenues at the segment increased 3.1% to $915.4 million from the prior-year figure of $887.6 million.

Propulsion Systems: The segment recorded revenues of $481.7 million in the reported quarter, up from $440.5 million a year ago.

Wing Systems: Revenues at this segment jumped 15.4% to $424.2 million.

Financial Position

As of Jun 30, 2016, Spirit AeroSystems had $800.5 million in cash and cash equivalents, compared with $957.3 million as of Dec 31, 2015.

Long-term debt (excluding current portion), as of Jun 30, 2016, was $1,071.6 million, compared with $1,085.3 million at the end of 2015.

Cash flow from operating activities decreased significantly to $308.8 million in the first half of 2016 from $729 million a year ago.

Capital expenditure was $54 million in the quarter compared with $75 million in the year-ago period.

Guidance

Spirit AeroSystems maintained its revenue forecast for 2016 in the range of $6.6 billion to $6.7 billion. However, it revised its EPS guidance to the range of $3.45 - $3.65 from $4.15 - $4.35 expected earlier.

Management now expects free cash flow in the range of $ 350 - $400 million, up from the prior expectation of $325 - $375 million.

Other Defense Releases

Rockwell Collins Inc. reported financial results for third-quarter fiscal 2016 ended Jun 30, 2016. The company’s adjusted earnings per share of $1.63 surpassed the Zacks Consensus Estimate of $1.59 by 2.5%. Reported earnings also improved 22.6% from $1.33 per share a year ago.

Raytheon Company reported second-quarter 2016 adjusted earnings from continuing operations of $1.75 per share, beating the Zacks Consensus Estimate of $1.70 by 2.9%. Earnings also increased 6.1% from the year-ago figure of $1.65.

B/E Aerospace Inc. reported second-quarter 2016 adjusted earnings of 84 cents per share, beating the Zacks Consensus Estimate of 82 cents by 2.44%.

Zacks Rank

Spirit AeroSystems currently has a Zacks Rank #3 (Hold).

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