Vought Aircraft Industries has delivered the second set of aft fuselage barrels to Boeing for the 787 programme, and says it continues to work on plans “to reduce the amount of work performed out of sequence”.
In a financial statement revealing a second quarter net profit decline of $8.4 million year-over-year to $26.1 million, Vought says: “The 787 programme continues to be on track, meeting Boeing’s requirements.”
Company president and CEO Elmer Doty adds: “We remain pleased with our progress on the 787 programme and the performance of our 787 team, despite the challenges of a new programme of this magnitude.
“Our focus continues to be on implementing schedule recovery plans, including working with our suppliers, to ensure that our entire team continues to meet the program requirements.”
Challenges faced by Vought were highlighted in June when a memo to Vought employees obtained by Seattle newspapers revealed the company had experienced “ongoing schedule slippage” in obtaining parts it is supposed to install before shipping fuselage sections to Boeing.
The disclosure came after reports surfaced that the head of 787 operations at Vought, Ted Perdue, had left the company.
In discussing its second quarter financial results, Vought says the decrease in net income “was primarily due to customer settlements recorded in the second quarter of 2006”.
Excluding the impact of the 2006 customer settlements, says Vought, net income increased $23.2 million “due to both higher sales and improved programme margins resulting from cost reduction efforts and price increases”.
Net sales for the three-month period were $427.6 million, a decrease of 6% compared with $456.1 million for the same period last year.
Sales in the second quarter of 2006 included $99.5 million from previously reported customer settlements. Excluding these settlements, second quarter sales were up $71 million or 20% due to increased deliveries and price increases.
“Results for the quarter demonstrate that our efforts to improve day-to-day execution of our business are having the intended impact. We are satisfied with the success of these initiatives so far, but we still have far to go to be best-in-class,” says Doty.
“We have plenty of opportunities and challenges ahead of us that ensure careful cash management will remain a priority.”