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UPDATE 3-Spirit Aero raises 2016 profit, revenue forecasts; sets first div

Published 2016-11-01, 02:08 p/m
© Reuters.  UPDATE 3-Spirit Aero raises 2016 profit, revenue forecasts; sets first div
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* Announces new share repurchase program of $600 mln

* Initiates qtrly dividend of $0.10/shr

* Raises 2016 profit forecast to $4.50-$4.65/shr from $4.30-$4.50

* Ship-set deliveries to Airbus rise to 156 units from 146

* Shares rise as much as 8.9 pct (Adds details from conference call)

By Ankit Ajmera

Nov 1 (Reuters) - Aircraft parts maker Spirit AeroSystems Holdings Inc SPR.N raised its full-year profit and revenue forecasts and unveiled a $600 million stock buyback program and its first-ever dividend.

Spirit Aero's shares rose as much as 8.9 percent on Tuesday, to their highest in nearly 10 months.

The Wichita, Kansas-based company, which set a quarterly dividend of 10 cents per share, said it now expected 2016 earnings of $4.50-$4.65 per share on an adjusted basis, up from a prior forecast of $4.30-$4.50. company's revenue forecast was raised to $6.7 billion-$6.8 billion from $6.6 billion-$6.7 billion.

Analysts attributed the raised revenue forecast partly to non-recurring revenue from Boeing (NYSE:BA) Co BA.N , Spirit Aero's biggest customer, in the third quarter ended Sept. 29.

Spirit Aero's earnings were helped by increased sales to Airbus Group SE AIR.PA , the company's second-biggest customer, as well as by a lower tax rate.

Spirit Aero said total ship-set deliveries - complete sets of parts for individual aircraft - rose to 368 units in the quarter, from 347 a year earlier, led by a 6.8 percent jump in shipments to Airbus.

Spirit Aero, spun off from Boeing in 2005, has been working to diversify away from dependence on its biggest customer, which accounted for 84 percent of its revenue in 2015.

Airbus has asked Spirit Aero to bid on new projects, Chief Executive Tom Gentile said on a call with analysts.

Spirit Aero hopes extra business from Airbus will allow it to expand all three of its divisions - fuselage, wing and propulsion systems. The company currently makes some sections of the fuselage and wing framework for certain Airbus planes.

The company said it repurchased 7.4 million shares in the third quarter, and completed its existing share repurchase program, which was to have run through December 2017. That reduced its share count and increased earnings per share.

Spirit Aero's net income fell to $145.1 million, or $1.16 per share, in the quarter, from $313.6 million, or $2.24 per share a year earlier. Revenue rose 7.4 percent to $1.71 billion.

Analysts had expected earnings of $1.07 per share and revenue of $1.65 billion, according to Thomson Reuters I/B/E/S.

The company's profit last year included a $189.4 million benefit from a deferred tax asset valuation allowance.

Spirit Aero's shares were up 7.3 percent at $54.04 in afternoon trading on Tuesday. Up to Monday's close, the stock had risen 0.6 percent this year, compared with a .3 percent increase in the Dow Jones U.S. Aerospace index .DJUSAS .

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