Spirit AeroSystems Holdings, Inc.

Revenue was $1.7 billion, up 19% from Q1 2023. GAAP EPS was -$5.31 versus -$2.68 a year ago, and adjusted EPS was -$3.93 versus -$1.69. Free cash flow usage was $444 million versus $69 million in Q1 2023. Net forward losses were $495 million, including $281 million on A350 and $167 million on A220, and unfavorable cumulative catch-up adjustments were $39 million. Quarter-end cash was $352 million and debt was $4.1 billion. For 2024, Spirit now expects 737 production to stay at about 31 per month for the rest of the year, 737 deliveries to be roughly 350-ish, and 787 deliveries to be about 55 units versus the original plan of about 80.

Pat Shanahan said the company remains focused on stabilizing operations, delivering for customers, and strengthening the balance sheet. He framed the 737 inspection overhaul as a major quality reset, saying the hard work of moving and aligning inspections is largely done and that the system should support higher rates later. He also said the company continues discussions with Boeing about a possible acquisition and described Airbus negotiations as ongoing but unresolved, emphasizing partnership over threats.

Mark Suchinski said the quarter was hit by delayed 737 delivery acceptance, higher inventory and contract assets, and lower cash flow as Boeing’s product verification process changed. He highlighted 737-related disruptions, including 45 additional fuselages in work in process, and said Boeing advanced $425 million in April to be repaid in the third quarter. He also quantified the forward losses: $495 million total, with $373 million tied to Airbus assumptions and future obligations, plus $34 million on 787 from supply chain and labor cost growth. He said the company is focused on liquidity and expects near-term cash pressure from the lower 737 rate and reduced 787 deliveries.

Analysts pressed for clarity on how 737 deliveries will recover, and management said second-quarter cash deliveries should be similar to Q1 before rising in the third and fourth quarters as the backlog of ship-in-place units is processed. Questions on Airbus centered on pricing and cash usage; management said prior assumptions had included higher pricing, but the lack of a new agreement forced reversals and additional losses, and Mark said Airbus accounts for about 80% to 85% of current forward-loss reserves or liabilities. Analysts also asked about the scale of the manufacturing changes and rate flexibility, and Pat said the quality process is more of a step change than a minor tweak, with the goal of supporting future rate increases while maintaining a buffer of inventory and talent.