Spirit AeroSystems' Q3 Earnings Miss Estimates, Down Y/Y

Spirit AeroSystems Holdings, Inc. SPR posted third-quarter 2015 adjusted earnings of 89 cents, missing the Zacks Consensus Estimate of 94 cents by 5.3%. Earnings were also lower than the year-ago figure of 90 cents.

On a GAAP basis, the company reported earnings of $2.24 per share in the reported quarter compared to $1.20 in the prior-year quarter. The difference between operating and GAAP results was due to an impact of $1.35 for the release of majority of deferred tax asset valuation allowance.
 

Spirit Aerosystems Holdings Inc. - Earnings Surprise | FindTheBest

Highlights of the Release

Total revenues of $1,594 million in the third quarter missed the Zacks Consensus Estimate of $1,662 million by 4.1%. However, the top line declined 5.8% year over year primarily due to the divestiture of the Gulfstream wing and lower revenues from the 787 program.

Backlog at the end of the quarter was $46 billion, registering a sequential decrease of $1 billion.

Segment Performance

Fuselage Systems: Revenues at the segment increased 2% to $820 million from the prior-year figure of $804 million.

Propulsion Systems: The segment recorded revenues of $430 million in the reported quarter, down from $442 million in the year-ago quarter.

Wing Systems: Revenues at this segment also decreased 23.5% year over year to $341 million.

Financial Position

As of Oct 1, 2015, Spirit AeroSystems had $1,042.7 million in cash and cash equivalents compared with $377.9 million as of Dec 31, 2014.

Long-term debt (excluding current portion) as of Oct 1, 2015, was $1,105 million, lower than $1,144.1 million at the end of 2014.

Cash flow from operating activities increased significantly to $240 million in the quarter from $119 million a year ago.

Capital expenditure was $101 million compared with $44.4 million in the year-ago period. Free cash flow was $139 million compared with $75 million in the prior-year period.

Guidance

Spirit AeroSystems maintained its 2015 revenue guidance in the range of $6.6 billion to $6.7 billion.

The company increased its earnings expectations for the year to $3.80−$3.95 per share from $3.60−$3.80 guided earlier. Additionally, management maintained its free cash flow projection of $700−$800 million and capital investments in the range of $325−$375 million.

Other Defense Releases

Raytheon Co. RTN reported third-quarter 2015 earnings from continuing operations of $1.47 per share, beating the Zacks Consensus Estimate of $1.40 by 5%.

Upcoming Releases

Ducommun Inc. DCO is scheduled to release its earnings on Nov 4, 2015, after the market closes.

LMI Aerospace Inc. LMIA is scheduled to release its earnings on Nov 6, 2015 before the opening bell.

Zacks Rank

Spirit AeroSystems currently has a Zacks Rank #2 (Buy).

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