Spirit AeroSystems (NYSE:SPR)' third quarter of 2023 saw a notable 13% increase in revenue to $1.4 billion, up from the same period in 2022. This growth was driven by higher production deliveries and an increase in Defense and Space and Aftermarket revenue. Shipset deliveries also rose to 332 in Q3 2023 from 316 in Q3 2022, with more Boeing (NYSE:BA) 737 units included in the count.
Despite these positive indicators, the company posted an operating loss of $133.7 million for the quarter. This was largely attributed to net forward loss charges of $101.1 million and unfavorable cumulative catch-up adjustments of $64 million. The company also reported a cash usage of $111 million in operations and free cash flow usage of $136 million.
CEO Pat Shanahan pointed to the memorandum of agreement with Boeing, signed on October 12, 2023, as a key financial strengthening strategy. Following this agreement, Spirit anticipates reversing liabilities, including previously recorded forward losses on the Boeing 787 program of approximately $350 to $370 million in Q4 2023.
Despite a backlog of $42.2 billion at the end of Q3, cash operations were negatively impacted by higher negative impacts on working capital. This was partially offset by a $50 million customer cash advance. Looking ahead, Spirit projects full-year 2023 cash used in operations to be between $150 and $200 million, with free cash flow usage estimated between $275 and $325 million due to lower projected Boeing 737 deliveries.
Earnings per share (EPS) for Q3 2023 stood at $(1.94), with an adjusted EPS of $(1.42) after excluding the incremental deferred tax asset valuation allowance. Other income for Q3 2023 was reported at $7.3 million, a significant improvement compared to an expense of $42.1 million in Q3 2022.
InvestingPro Insights
Drawing from InvestingPro's real-time data and tips, we can provide further insight into Spirit AeroSystems' financial situation. According to InvestingPro, Spirit operates with a significant debt burden, which aligns with the company's Q3 2023 report of an operating loss of $133.7 million. The company's management has been aggressively buying back shares, which could be an attempt to stabilize the stock price and return value to shareholders.
InvestingPro's data reveals a market capitalization of $2510M USD and a negative P/E ratio of -2.92, indicating that the company is not currently profitable. The revenue for the last twelve months as of Q2 2023 was $5393.1M USD, demonstrating a growth of 20.31%, which aligns with the reported increase in revenue in the Q3 report.
InvestingPro also offers a wealth of additional tips and data for those interested in a deeper analysis of Spirit AeroSystems or any other company. For example, there are 17 additional tips available for Spirit AeroSystems on InvestingPro's platform, offering a more comprehensive understanding of the company's financial health and future prospects.
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