{"id":74032,"date":"2023-10-18T12:22:10","date_gmt":"2023-10-18T16:22:10","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/spirit-aerosystems-stock-soars-on-a-big-deal-with-boeing-heres-whats-in-it\/"},"modified":"2023-10-18T12:22:14","modified_gmt":"2023-10-18T16:22:14","slug":"spirit-aerosystems-stock-soars-on-a-big-deal-with-boeing-heres-whats-in-it","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=74032","title":{"rendered":"Spirit AeroSystems Stock Soars on a Big Deal With Boeing. Here’s What’s In It."},"content":{"rendered":"
\n
<\/p>\n

<\/p>\n

<\/p>\n<\/figure><\/div>\n

Aerospace supplier
\n Spirit AeroSystems
\n said Wednesday that its key customer,
\n Boeing,<\/span>
\n has agreed to help it through its production problems. <\/strong><\/p>\n

\n Spirit AeroSystems
\n stock (ticker: SPR) was flying as a result, surging 20% to $20.70 in early Wednesday trading. The
\n S&P 500
\n and
\n Dow Jones Industrial Average
\n were down 0.5% and 0.4%, respectively. <\/p>\n

\n

Help from
\n Boeing
\n (BA) is a big deal for Spirit AeroSystems, which supplies fuselage sections for many Boeing jets. Boeing accounted for about 65% of Spirit Aero\u2019s revenue in 2022.<\/p>\n

\u201cOur collective teams will focus on further generating supply chain performance and resiliency,\u201d Spirit Aero CEO Patrick\u00a0M. Shanahan said in a news release Wednesday. \u201cThis united effort to synchronize our production systems will enable greater market responsiveness and delivery assurance.\u201d<\/p>\n

The deal includes a lot of financial help, too. According to a filing with the Securities and Exchange Commission, there are \u201crecurring price increases\u201d for 787 \u201cshipsets\u201d as Spirit calls the parts that it sells to Boeing. There will be price decreases for 737 shipsets starting in 2026. <\/p>\n

Price reductions tend to come with higher volumes. The result of all the changes should be more revenue in the near term. Spirit Aero estimates $60 million more revenue in 2023, $395 million more in aggregate between 2024 and 2025, followed by $25 million less between 2026 and 2028 and $240 million less between 2029 and 2033, according to the SEC filing.<\/p>\n

Overall it\u2019s an increase of $190 million in sales over the next decade, but\u00a0with benefits coming now.<\/p>\n

Along with the pricing changes, the deal includes money from Boeing for tooling, changes to product liability claims, and restructured finance payments due from Spirit Aero to Boeing.<\/p>\n

It has been an incredibly difficult time for Spirit Aero. First came Boeing\u2019s issues with the 737 MAX jet, which crashed twice in a span of five months, grounding the plane worldwide between March 2019 and November 2020. Then came Covid-19, which hit demand for air travel and caused seemingly endless manufacturing supply-chain problems. After that, there have been quality problems on some 737 MAX products because of Spirit Aero-generated defects. <\/p>\n

Spirit Aero\u2019s shares are still down about 16% over the past year and 75% over the past five years. The new agreement is part of the process of making Spirit Aero stock investible again. It should also benefit Boeing, which wants to increase production of the 737 MAX. Having a healthy supply base is part of that process. <\/p>\n

\u201cBoeing is pleased to have reached a mutually beneficial agreement with Spirit AeroSystems,\u201d said the company in an emailed statement. \u201cThis agreement with our valued supplier will enhance operational stability in our production system and help us deliver on our customer commitments.\u201d<\/p>\n

Boeing stock was up 0.7% in early trading. <\/p>\n

Write to Al Root at allen.root@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Aerospace supplier Spirit AeroSystems said Wednesday that its key customer, Boeing, has agreed to help it through its production problems. Spirit AeroSystems stock (ticker: SPR) was flying as a result, surging 20% to $20.70 in early Wednesday trading. The S&P 500 and Dow Jones Industrial Average were down 0.5% and 0.4%, respectively. Help from Boeing […]<\/p>\n","protected":false},"author":1,"featured_media":74033,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-74032","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nSpirit AeroSystems Stock Soars on a Big Deal With Boeing. 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