Spirit expects quarterly loss as coronavirus hits plane output

(Reuters) – Spirit AeroSystems Holdings Inc (SPR.N) said on Tuesday it would swing to a first-quarter loss and warned of a bigger blow in the current quarter, as customers Boeing Co (BA.N) and Airbus SE (AIR.PA) whittle down production due to the coronavirus pandemic.

Shares of the U.S. aircraft parts maker fell as much as 3% to $20 in the session, adding to the 72% fall in value this year.

Boeing, which accounts for nearly 80% of Spirit’s revenue, and Airbus have halted or cut production of their planes after the coronavirus crisis triggered aviation’s worst industrial crisis and drastically reduced deliveries to cash-starved airlines.

“Our expectation is that our business operations will not improve until our customers are willing to produce aircraft at sufficient levels,” Spirit said here in a statement.

“This may not occur until well after the broader global economy begins to improve.”

The company has already announced various cost-cutting measure this year, including the lay off of 2,800 workers at its marquee facility in Wichita, a 20% pay cut for all its U.S.-based executives and furloughing some workers involved in Boeing’s production.

The company said it expects to report first-quarter loss of $160 million compared with a profit of $163 million in the prior year.

Spirit estimates it delivered 324 shipsets – a complete set of parts for each aircraft – in the quarter ended April 2 down from 453 shipsets a year ago, with revenue expected to fall about 46% to $1.07 billion.

Spirit said the virus outbreak would impact its financial performance in the current quarter much more significantly than in the first quarter, as it expects a slow economic recovery after the pandemic.

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