Investors showed disdain forSpirit AeroSystems Holdings on Thursday after the company reported less than stellar fourth-quarter earnings.
The Wichita, Kan.-based manufacturer of commercial aerostructures for customers like Boeing ( BA - news -people ) and Airbus earned $50 million, or 36 cents per share. The fourth quarter results reflect a pre-tax catch-up adjustment charge of $34 million, or 17 cents per share, stemming from changes in contract profitability estimates. Analysts polled by Thomson Reuters predicted profits of 54 cents per share.
Sales for the quarter fell in line with analysts’ estimates at $1.1 billion, up 67% from the same period in 2008 when a strike at Boeing negatively impacted deliveries.
“For Spirit, 2009 financial results were disappointing,” says Jeff Turner, Spirit’s president and chief executive. “During the year we encountered challenges on new programs and faced cost pressures on our core programs as we recovered from the IAM strike at Boeing early in the year and began transitioning resources between programs late in the year.”
Investors reacted negatively to the results, sending shares down $3.79, or 17.7%, to close at $18.42 on Thursday.
According to Goldman Sachs analyst Noah Poponak, the one silver lining for Spirit might be its solid cash flow, though he notes that the stock price likely already reflects that after a bump up following Boeing’s announcement last week. (See “Boeing’s Dreamliner Passes Tests“).
The aircraft industry has been looking to the growing Asian market to rehabilitate sales and revive the industry–while global air travel dropped by 2% last year, domestic air travel in China jumped 21%. Boeing estimates that in the next 20 years the burgeoning Chinese market will require 3,800 airplanes at a cost of $400 billion. The aircraft and defense manufacturer plans to send its first China-dedicated sales executive to Beijing soon.
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