Spirit AeroSystems reports $577 million quarterly operating loss

(Reuters) -Spirit AeroSystems reported a $577 million fourth-quarter operating loss on Friday, swinging from $215 million in operating income a year earlier, which was helped by a funding agreement with key customer Boeing.

The major supplier to the U.S. planemaker reported $2.1 billion in net losses for 2024, and it "will need to obtain additional funding to sustain operations, as we expect to continue generating operating losses for the foreseeable future," the company said in its earnings announcement on Friday.

Its two key customers -- Boeing and European rival Airbus -- already agreed in the fourth quarter to provide cash infusions: $350 million in advance payments from Boeing and up to $107 million in non-interest bearing credit from Airbus. In November, Spirit warned that there was "substantial doubt" it would be able to continue as a going concern.

Boeing is in the process of acquiring its Wichita-based former subsidiary in a deal expected to close by mid-year, said President and CEO Pat Shanahan in a statement.

Spirit Aero reported free cash flow, a metric closely watched by investors, of $91 million during the quarter compared with $42 million a year earlier. Revenue declined 9% to $1.65 billion during the quarter. 

Spirit, which produces aerostructure parts for both Boeing and Airbus, said its deliveries were up on models for both planemakers during the quarter.

“Deliveries were up twofold on the 737, 37% on the A220 and 15% on the A350 compared to the prior quarter,” said Chief Financial Officer Irene Esteves in a statement.

“We believe this progress demonstrates that, with the right customer support, we are able to meet current demands while also investing for future production rate increases.”

The company did not give guidance for 2025, but it expects "significant reductions" in projected revenue and cash flows for the year due to production changes at Boeing, lower than planned 737 production rates and no price increases on Airbus programs, the announcement said.

The fourth quarter losses include net forward losses of $440 million -- $167 million on its Boeing 787 program, $73 million for Airbus' A220 and $64 million on its Airbus A350 program -- due to production performance issues and higher labor and supply chain costs.

(Reporting By Allison Lampert in Montreal and Dan Catchpole in Seattle; Editing by Bill Berkrot and David Gregorio)