Spirit AeroSystems still counting storm costs as Q1 profits double

Washington DC
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Spirit AeroSystems now expects to catch up by early July on product shipments delayed by tornado damage to its facility in Wichita, Kansas, last month, but the financial cost of the disruption will not be revealed until early July.

Recovery efforts could slow Spirit AeroSystems' momentum after doubling profits in the first quarter compared with a year ago. Net income rose to $73.6 million as revenues increased 20% to $1.27 billion as shipset deliveries increased from 261 to 303 year over year.

A tornado on 14 April knocked out production at the aircraft structures supplier for eight full days. All employees of Spirit Aerosystems returned on 23 April, but continuing repairs are still limiting production nearly three weeks after the storm.

Jeff Turner, chief executive of Spirit AeroSystems, told analysts today on a first quarter earnings call that the company will restore full-rate production in the "short-term".

"I think we are very near now to full production rate," Turner adds.

Product shipments should be recovered within three months, but at a higher than normal cost, Turner says.

"We had a full week of production lost and deliveries which haven't been made up and frankly will be made up at premium overtime [labour rates]," Turner says.

The financial impact also includes the cost of repairing damaged buildings. Spirit AeroSystems is currently discussing insurance claims with several of its carriers, Turner says.