Spirit AeroSystems’ Shares Take a Hop as it Wings Airbus Deal



Spirit AeroSystems declares 2Q16 earnings

Spirit AeroSystems Holdings (SPR) is a manufacturer of airplane (XAR) parts like fuselages, propulsion systems, and wings. The company was spun-off from the airframer (PPA) Boeing (BA) in 2005, and today it designs and manufactures aerostructures for every Boeing aircraft currently in production.

Spirit AeroSystems declared its 2Q16 earnings on August 3, 2016. The earnings results relate to its operating performance for the quarter ending June 30. The business of Spirit AeroSystems is classified into Fuselage Systems, Propulsion Systems, and Wing Systems. In 2Q16, Fuselage Systems represented 50% of total revenues, whereas Propulsion Systems and Wing Systems constituted 26.3% and 23.2%, respectively, of total revenues.

Spirit’s 2Q16 operating performance was received favorably by investors. The company’s announcement regarding the successful negotiation of the A350 contract with Airbus (EADSY) resulted in the stock gaining 7.1% on the day of the earnings release. The stock closed at $46.01 on August 3, 2016.

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Spirit AeroSystems’ adjusted earnings per share

Spirit AerosSystems managed to increase its adjusted EPS (earnings per share) by 11% YoY (year-over-year), primarily by lowering share count but also by prudent cost management. The company reported adjusted EPS of $1.21, as compared to Wall Street estimates of $1.06. Spirit AeroSystems initiated a $600 million share buyback program earlier this year. As a part of that plan, it has repurchased $318 million worth of stock year-to-date. In comparison to 2Q15, its share count was lower by 7.7%.

In the next part, we’ll discuss SPR’s 2Q16 revenues in greater detail.


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