Spirit AeroSystems continues bleeding cash in Q3

Spirit AeroSystems has reported that it has continued to bleed cash in Q3, which, while lower than during the same quarter a year prior, was still negative, with the company looking forward to being reintegrated into Boeing.

Spirit AeroSystems unveiled its Q3 results, showcasing that during the three and nine-month periods, its free cash flow (FCF) burn was $230 million and $894 million, respectively, representing an improvement compared to the same periods in 2024.

The improvement was largely due to the “timing of working capital driven by higher Boeing 737 deliveries,” with the company ending the quarter with a cash balance of $299 million.

At the same time, the company warned that it will need to obtain additional funding to sustain operations, as it expects “to continue generating operating losses for the foreseeable future.”

“Although the customer advances received in 2024 and 2025 have provided essential operational liquidity, there can be no assurance that Spirit will be able to obtain additional advances from customers, repay current advances on the specified due dates, renegotiate the due dates, or otherwise obtain additional liquidity as needed under acceptable terms or at all.”

The supplier of several major commercial aircraft programs outlined that it has a plan to improve its liquidity, yet the plan hinges on many factors, including but not exclusive to achieving forecasted 737 deliveries, and the expected timing and outcome related to its merger with Boeing.

“However, there can be no assurance that these plans or strategies will sufficiently improve our liquidity needs or that we will otherwise realize the anticipated benefits. Accordingly, substantial doubt about the Company’s ability to continue as a going concern exists.”

Spirit AeroSystems outlined that its merger with Boeing should conclude in Q4, with its only remaining hurdle being the regulatory authorities in the United States. The European Commission (EC) approved the transaction earlier in October.

Europe greenlights Boeing-Spirit AeroSystems merger

The EC determined that Boeing offered sufficient remedies to alleviate its competition concerns.

The Engine CowlRytis Beresnevicius

While the supplier has ceased to hold quarterly earnings calls after its announced merger with Boeing, with its last call having been held on May 7, 2024, during Boeing’s Q3 earnings call, Kelly Ortberg, the President and Chief Executive Officer (CEO) of the company, said that there should not be “any showstoppers here” when it comes to gaining US’ approval for the merger.

During the same call, Jesus Malave, the Chief Financial Officer (CFO) of Boeing, praised Spirit AeroSystems for delivering 737 fuselages “with improved quality and flow, which sets us up well for both our future production ramp and the planned reintegration.”

In Q3, Spirit AeroSystems’ revenues climbed 8% year-on-year (YoY) to $1.5 billion. But its quarterly net loss worsened to $724 million, with a net loss of revenue percentage of 45.7%. In Q3 2024, it was 32.4%.

Spirit AeroSystems’ $647 million quarterly operating loss increased primarily due to “higher changes in estimates charges, and lower program margins on Boeing programs, partially offset by lower excess capacity charges and a reversal of accrued liabilities,” it said, adding that it had $585 million of net forward losses during the quarter.

These were primarily driven by the Boeing 737, 787, Airbus A220, and A350 programs, “largely due to supply chain and production cost growth.”