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Why Is Spirit Aerosystems (SPR) Down 0.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Spirit Aerosystems (SPR - Free Report) . Shares have lost about 0.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Spirit Aerosystems due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Spirit AeroSystems Q3 Loss Widens, Revenues Rise Y/Y
Spirit AeroSystems reported a third-quarter 2024 adjusted loss of $3.03 per share, which came in much wider than the Zacks Consensus Estimate of a loss of 16 cents per share. The loss also widened from the year-ago quarter’s reported loss of $1.42 per share.
Barring one-time adjustments, Spirit AeroSystems recorded a GAAP loss of $4.07 per share compared with a loss of $1.94 in the prior-year period.
The year-over-year deterioration in the bottom line can be attributed to a higher operating loss incurred in the third quarter of 2024 compared with the third quarter of 2023.
Highlights of the Release
Total revenues of $1.47 billion missed the Zacks Consensus Estimate of $1.83 billion by 19.6%. However, the top line rose 2.2% on a year-over-year basis, driven by higher production activities of the most of the company’s commercial programs. Higher Defense and Space revenues also contributed to SPR’s total revenue growth.
Spirit AeroSystems’ backlog at the end of the third quarter totaled $48 billion, in line with the prior quarter’s figure.
Segmental Performance
Commercial Segment: Revenues in the segment rose 0.3% year over year to $1.14 billion. The upside was driven by higher production across most of its programs.
The segment’s operating loss was $299.4 million compared with the operating loss of $82.1 million in the year-ago period. The deterioration can be attributed to higher changes in estimates.
Defense & Space: The segment recorded revenues of $231.3 million, up 12.4% year over year, driven by increased activity in the Sikorsky CH-53K program and non-recurring revenues from the FLRAA program associated with Spirit’s closeout of the program.
The unit’s operating income increased a massive 357.1% to $44.8 million from $9.8 million in the prior-year quarter, driven by higher activities in the Sikorsky CH-53K program, the non-recurring FLRAA program revenues, as well as favorable cumulative catch-up adjustments of $12 million.
Aftermarket: This segment’s top line improved 2.8% year over year to $99.5 million, driven by higher spare part sales.
The segment’s operating profit decreased 51.4% year over year to $8.7 million due to the sales mix.
Operational Highlights
Total operating costs and expenses rose 15.8% year over year to $1.82 billion due to the higher cost of sales, selling, general and administrative expenses, and higher research and development expenses.
SPR’s operating loss in the third quarter of 2024 totaled $350.1 million compared with the operating loss of $133.7 million in the prior-year quarter. This deterioration was mainly due to unfavorable changes in estimates.
Financial Position
As of Sept. 26, 2024, Spirit AeroSystems had $217.6 million in cash and cash equivalents compared with $823.5 million as of Dec. 31, 2023.
The long-term debt as of Sept. 26, 2024, totaled $3.98 billion compared with $4.02 billion as of Dec. 31, 2023.
Cash outflow from operating activities amounted to $1.26 billion during the first nine months of 2024 compared with cash outflow of $0.34 billion recorded a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -389.5% due to these changes.
VGM Scores
At this time, 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 fifth 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
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Spirit Aerosystems has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Spirit Aerosystems (SPR) Down 0.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Spirit Aerosystems (SPR - Free Report) . Shares have lost about 0.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Spirit Aerosystems due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Spirit AeroSystems Q3 Loss Widens, Revenues Rise Y/Y
Spirit AeroSystems reported a third-quarter 2024 adjusted loss of $3.03 per share, which came in much wider than the Zacks Consensus Estimate of a loss of 16 cents per share. The loss also widened from the year-ago quarter’s reported loss of $1.42 per share.
Barring one-time adjustments, Spirit AeroSystems recorded a GAAP loss of $4.07 per share compared with a loss of $1.94 in the prior-year period.
The year-over-year deterioration in the bottom line can be attributed to a higher operating loss incurred in the third quarter of 2024 compared with the third quarter of 2023.
Highlights of the Release
Total revenues of $1.47 billion missed the Zacks Consensus Estimate of $1.83 billion by 19.6%. However, the top line rose 2.2% on a year-over-year basis, driven by higher production activities of the most of the company’s commercial programs. Higher Defense and Space revenues also contributed to SPR’s total revenue growth.
Spirit AeroSystems’ backlog at the end of the third quarter totaled $48 billion, in line with the prior quarter’s figure.
Segmental Performance
Commercial Segment: Revenues in the segment rose 0.3% year over year to $1.14 billion. The upside was driven by higher production across most of its programs.
The segment’s operating loss was $299.4 million compared with the operating loss of $82.1 million in the year-ago period. The deterioration can be attributed to higher changes in estimates.
Defense & Space: The segment recorded revenues of $231.3 million, up 12.4% year over year, driven by increased activity in the Sikorsky CH-53K program and non-recurring revenues from the FLRAA program associated with Spirit’s closeout of the program.
The unit’s operating income increased a massive 357.1% to $44.8 million from $9.8 million in the prior-year quarter, driven by higher activities in the Sikorsky CH-53K program, the non-recurring FLRAA program revenues, as well as favorable cumulative catch-up adjustments of $12 million.
Aftermarket: This segment’s top line improved 2.8% year over year to $99.5 million, driven by higher spare part sales.
The segment’s operating profit decreased 51.4% year over year to $8.7 million due to the sales mix.
Operational Highlights
Total operating costs and expenses rose 15.8% year over year to $1.82 billion due to the higher cost of sales, selling, general and administrative expenses, and higher research and development expenses.
SPR’s operating loss in the third quarter of 2024 totaled $350.1 million compared with the operating loss of $133.7 million in the prior-year quarter. This deterioration was mainly due to unfavorable changes in estimates.
Financial Position
As of Sept. 26, 2024, Spirit AeroSystems had $217.6 million in cash and cash equivalents compared with $823.5 million as of Dec. 31, 2023.
The long-term debt as of Sept. 26, 2024, totaled $3.98 billion compared with $4.02 billion as of Dec. 31, 2023.
Cash outflow from operating activities amounted to $1.26 billion during the first nine months of 2024 compared with cash outflow of $0.34 billion recorded a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -389.5% due to these changes.
VGM Scores
At this time, 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 fifth 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
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Spirit Aerosystems has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.