(Reuters) -Spirit AeroSystems reported a higher first-quarter cash burn on Tuesday, squeezed by lower 737 production at the aerospace supplier’s biggest customer, Boeing.
Cash burn was $444 million in the three months ended March 28, from $69 million a year earlier, the Wichita, Kansas-based company said.
Shares fell 4% before the bell as the company again refrained from offering a financial forecast for 2024 and recorded losses on its A350 and A220 parts programs for its other client Airbus.
The Federal Aviation Administration’s (FAA) ramped up quality checks have pushed 737 MAX production much below the 38 per month cap the regulator had imposed, Reuters reported last month.
The restriction followed a Jan. 5 mid-air door plug blowout on a 737 MAX 9 jet, the fuselage for which was made by Spirit Aero.
Spirit said on Tuesday its current 737 fuselage production rate was about 31 per month, below levels it had anticipated last year.
Meanwhile, Boeing’s talks to acquire the company has hit a hurdle after Airbus has called for financial compensation to take on money-losing operations, Reuters reported last week.
Talks with Boeing were ongoing, Spirit said on Tuesday.
Compounding the company’s cost concerns, the planemaker has clamped down on traveled work – a practice of completing work on a production line out of the ordinary sequence – and has said it would take only fuselages that adhere to quality standards.
Sales to the U.S. planemaker accounted for 64% of Spirit’s revenues last year.
Spirit recorded losses of $280.8 million and $167.0 million on the A350 and the A220 programs, respectively, as it is yet to reach a deal with the European planemaker to mitigate higher costs.
Quarterly adjusted loss per share widened to $3.93 from $1.69, while revenue rose 19% to about $1.7 billion on higher overall sales from its commercial, space and defense programs.
(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Sriraj Kalluvila)
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