Spirit AeroSystems Holdings Inc said on Wednesday it expects a $31 million hit to full-year gross profit from disruptions and rework related to a Boeing 737 MAX fuselage production problem, and that more related costs are anticipated.
said on Wednesday it expects a $31 million hit to full-year gross profit from disruptions and rework related to a Boeing 737 MAX fuselage production problem, and that more related costs are anticipated.it had paused deliveries of some 737 MAXs due to a problem involving two fittings that join the aft fuselage made by Spirit to the vertical tail, which were not attached correctly.
"However, the company cannot reasonably estimate the remaining potential costs at this time," it added. "The implication is that rework is a fraction of the cost, with the bulk being factory disruption," said J.P. Morgan analyst Seth Seifman in a note to investors. "What is not covered here is the cost of this issue at Boeing’s facility in Renton."
Repair work to fuselages in Spirit's factory is expected to be completed by the end of July. The company has also started to build and deliver production-conforming 737 fuselages under a revised process, it said.As a result of the disruption at its factories due to the 737 manufacturing issue, Spirit logged $12 million in unfavorable cumulative catch-up adjustments.
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