(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 https://www.sec.gov/Archives/edgar/data/1364885/000162828020004942/spr20200413-8kex992.htm 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.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Amy Caren Daniel)