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Why Is Spirit Aerosystems (SPR) Up 14.2% Since Last Earnings Report?

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A month has gone by since the last earnings report for Spirit Aerosystems (SPR - Free Report) . Shares have added about 14.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Spirit Aerosystems due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Spirit AeroSystems Posts Wider Q1 Loss, Beats on Revenues

Spirit AeroSystems Holdings, Inc. incurred first-quarter 2021 adjusted loss of $1.22 per share, which was wider than the Zacks Consensus Estimate’s loss of 93 cents. The bottom line, moreover, deteriorated from the year-ago quarter’s loss of 79 cents.

Including one-time adjustments, the company reported a GAAP loss of $1.65 per share compared with a loss of $1.57 in the year-ago quarter.

Highlights of the Release

Total revenues of $900.8 million exceeded the Zacks Consensus Estimate of $859 million by 4.9%. However, the top line declined 16% from $1,077 million on a year-over-year basis. The downside was primarily due to the significantly lower widebody production rates due to reduced international air traffic resulting from the impacts of COVID-19 as well as lower production rates on the Airbus A320 program.

Backlog at the end of first-quarter 2021 was $33 billion compared with $42 million at the end of 2020.

Segment Performance

Fuselage Systems: Revenues in the segment declined 20.7% year over year to $437.1 million in first-quarter 2020, primarily due to lower production volumes on the Boeing 777, 787 and Airbus A350 programs.

Operating loss for the first quarter of 2021 decreased to $59.8 million from the operating loss of $86.4 million in the year-ago quarter.

Propulsion Systems: The segment recorded revenues of $226.5 million in the reported quarter, up 0.6% year over year. The upside can be attributed to increased revenues from the 737 MAX program and aftermarket sales.

Operating income for the first quarter of 2021 amounted to $16.7 million against the operating loss of $5.3 million in the year-ago quarter.

Wing Systems: Revenues in the segment decreased 23.3% year over year to $223.6 million in the first quarter. The decline can be primarily attributed to lower production volumes on the Boeing 787, Airbus A320 and A350 programs.

Operating loss for the first quarter of 2021 decreased to $18.9 million against the operating income of $13.6 million in the year-ago quarter.

Operational Highlights

Total operating costs and expenses declined 17.5% year over year to $1026.7 million on account of lower cost of sales; selling, general and administrative expenses; restructuring costs, as well as reduced research and development expenses.

The company incurred an operating loss of $125.9 million in the first quarter of 2021 compared with the operating loss of $167.5 million in the prior-year quarter.

Financial Position

As of Apr 2, 2021, Spirit AeroSystems had $1,359.3 million of cash and cash equivalents compared with $1,873.3 million as of Dec 31, 2020.

At the end of first-quarter 2021, long-term debt totaled $3,525.2 million compared with $3,532.9 million at the end of 2020.

Cash outflow from operating activities was $170.2 million at the end of first-quarter 2021 compared with the cash outflow of $331.3 million at the end of 2020.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, Spirit Aerosystems has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Spirit Aerosystems has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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