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Will 787 Production Aid Spirit AeroSystems (SPR) Q1 Earnings?
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Spirit Aerosystems Holdings, Inc. (SPR - Free Report) is set to release first-quarter 2019 results on May 1, before the opening bell.
Increased segmental revenue expectations should boost the company’s first-quarter earnings. In the last reported quarter, the company delivered a positive earnings surprise of 3.93%.
Let’s see how things are shaping up prior to this announcement.
Fuselage Systems Likely to Drive Growth
Spirit AeroSystems’ Fuselage Systems segment, which represents more than 50% of its total sales, has continued to be a major growth driver for the company. Historically, revenues at this segment have been driven by increased production of Boeing 737 and Airbus A350 jets. Unfortunately, two fatal crashes caused the subsequent grounding of Boeing (BA - Free Report) 737 jets worldwide, resulting in poor delivery figures for this model in the first quarter.
However, the demand for A350 remains high and solid production of these jets is expected to boost the Fuselage Systems segment’s top line in the soon-to-be-reported quarter. In fact, in November 2018, the company completed a new 11,000 square foot Trim & Drill expansion facility to support the A350 XWB program. This facility will enable the company to produce more fuselage systems.
Considering these developments, the Zacks Consensus Estimate for the segment’s first-quarter sales, pegged at $1,006 million, indicates a 4.5% rise from the year-ago quarter’s $963 million.
Spirit Aerosystems Holdings, Inc. Price and EPS Surprise
With Boeing’s 787 production rate increasing to 14 aircraft per month from 12 since the beginning of 2019, Spirit AeroSystems’ Propulsion Systems segment is expected to witness revenue growth in the soon-to-be-reported quarter. In line with this, the Zacks Consensus Estimate for the segment’s first-quarter sales, pegged at $499million, suggests growth of 26.3% from the prior-year quarter figure.
In fact, all the three business segments of the company are expected to deliver solid performances in the first quarter, including the Wing Systems segment. As a result, the Zacks Consensus Estimate for Spirit AeroSystems’ first-quarter revenues, pegged at $1.94 billion, implies an 11.7% improvement from the prior-year quarter number.
Backed by these above-mentioned tailwinds, the company is anticipated to witness solid bottom-line growth in the to-be-reported quarter. Moreover, the company continues to focus on its cost reduction initiatives, which in turn may result in robust earnings.
For Spirit AeroSystems’ first-quarter earnings, the Zacks Consensus Estimate stands at $1.67 per share, indicating an annual rise of 51.8% from the year-ago quarter figure.
However, margins are expected to remain under pressure in the first quarter as the company is trying to ramp up inventory.
What the Zacks Model Unveils
Our proven model does not conclusively show that Spirit AeroSystems is likely to beat earnings in the first quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies in the Aerospace sector that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Curtiss Wright Corporation (CW - Free Report) is set to report first-quarter 2019 results on May 8. The company has an Earnings ESP of +0.57% and a Zacks Rank #3.
Huntington Ingalls Industries, Inc. (HII - Free Report) is scheduled to report first-quarter 2019 results on May 2. The company has an Earnings ESP of +1.93% and a Zacks Rank #3.
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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Will 787 Production Aid Spirit AeroSystems (SPR) Q1 Earnings?
Spirit Aerosystems Holdings, Inc. (SPR - Free Report) is set to release first-quarter 2019 results on May 1, before the opening bell.
Increased segmental revenue expectations should boost the company’s first-quarter earnings. In the last reported quarter, the company delivered a positive earnings surprise of 3.93%.
Let’s see how things are shaping up prior to this announcement.
Fuselage Systems Likely to Drive Growth
Spirit AeroSystems’ Fuselage Systems segment, which represents more than 50% of its total sales, has continued to be a major growth driver for the company. Historically, revenues at this segment have been driven by increased production of Boeing 737 and Airbus A350 jets. Unfortunately, two fatal crashes caused the subsequent grounding of Boeing (BA - Free Report) 737 jets worldwide, resulting in poor delivery figures for this model in the first quarter.
However, the demand for A350 remains high and solid production of these jets is expected to boost the Fuselage Systems segment’s top line in the soon-to-be-reported quarter. In fact, in November 2018, the company completed a new 11,000 square foot Trim & Drill expansion facility to support the A350 XWB program. This facility will enable the company to produce more fuselage systems.
Considering these developments, the Zacks Consensus Estimate for the segment’s first-quarter sales, pegged at $1,006 million, indicates a 4.5% rise from the year-ago quarter’s $963 million.
Spirit Aerosystems Holdings, Inc. Price and EPS Surprise
Spirit Aerosystems Holdings, Inc. Price and EPS Surprise | Spirit Aerosystems Holdings, Inc. Quote
Other Factors at Play
With Boeing’s 787 production rate increasing to 14 aircraft per month from 12 since the beginning of 2019, Spirit AeroSystems’ Propulsion Systems segment is expected to witness revenue growth in the soon-to-be-reported quarter. In line with this, the Zacks Consensus Estimate for the segment’s first-quarter sales, pegged at $499million, suggests growth of 26.3% from the prior-year quarter figure.
In fact, all the three business segments of the company are expected to deliver solid performances in the first quarter, including the Wing Systems segment. As a result, the Zacks Consensus Estimate for Spirit AeroSystems’ first-quarter revenues, pegged at $1.94 billion, implies an 11.7% improvement from the prior-year quarter number.
Backed by these above-mentioned tailwinds, the company is anticipated to witness solid bottom-line growth in the to-be-reported quarter. Moreover, the company continues to focus on its cost reduction initiatives, which in turn may result in robust earnings.
For Spirit AeroSystems’ first-quarter earnings, the Zacks Consensus Estimate stands at $1.67 per share, indicating an annual rise of 51.8% from the year-ago quarter figure.
However, margins are expected to remain under pressure in the first quarter as the company is trying to ramp up inventory.
What the Zacks Model Unveils
Our proven model does not conclusively show that Spirit AeroSystems is likely to beat earnings in the first quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Spirit AeroSystems has an Earnings ESP of -2.01% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks That Warrant a Look
Here are some companies in the Aerospace sector that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Curtiss Wright Corporation (CW - Free Report) is set to report first-quarter 2019 results on May 8. The company has an Earnings ESP of +0.57% and a Zacks Rank #3.
Huntington Ingalls Industries, Inc. (HII - Free Report) is scheduled to report first-quarter 2019 results on May 2. The company has an Earnings ESP of +1.93% and a Zacks Rank #3.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>