Spirit AeroSystems’ revenues take to the air
Spirit AeroSystems Holdings’ (SPR) revenues increased by 7.7% YoY (year-over-year) to $1.83 billion in 2Q16. This was higher than Wall Street estimates of $1.69 billion. The major contributor to the increase in revenues was the record number of shipsets (sets of parts used in aircraft (XAR) systems) delivered to Airbus (EADSY), which increased from 154 in 2Q15 to 188 in 2Q16.
The incrementals were seen primarily in the A320 family, wherein shipset deliveries increased from 120 to 145. The number of shipsets delivered to the A350 also increased from nine in 2Q15 to 15 in 2Q16. The number of shipsets delivered to Boeing (BA) increased marginally YoY from 196 to 198 in 2Q16.
Wings Systems’ sales
The company’s Wings Systems segment accounted for a major portion of the increase in shipsets for A320 and A350, with revenues from the segment increasing by 15.4% to $424.2 million. The market for manufacturing wings is extremely competitive, and the ability of Spirit AeroSystems to increase its margins in the segment is a positive development for 2Q16. Revenues from the segment, which constitutes 23% of sales for the company, had been declining for the past five consecutive quarters.
Other segments’ sales
Fuselage systems, the company’s largest segment, accounted for half of Spirit AeroSystems sales and grew by 3.1% YoY to $915 million in 2Q16. Fuselage systems was also a beneficiary of the increased shipsets to the A350 program. The segment also recognized higher revenues from certain non-recurring programs. Notably, Spirit competes with its own customers, including Airbus and Boeing, to manufacture fuselages, which serve as the main bodies of aircrafts (PPA).
Non-recurring revenues also benefitted the Propulsion Systems segment, wherein revenues increased by 9.3% YoY to $482 million in 2Q16.