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Spirit AeroSystems has acknowledged a quality issue that affected some Boeing 737 models.
Emmanuel Dunand/AFP via Getty Images
Boeing
The stock fell on Thursday amid concerns about a quality issue associated with the supplier
Soul Aviation Systems
Which affects some 737 models. Although not an immediate safety issue, aircraft deliveries from the manufacturer are at risk.
Boeing
(Stock symbol: BA) said in a statement that it had identified non-compliant mounting holes in the rear pressure bulkhead on some 737s. The planemaker said this was not an immediate flight safety issue, and that the 737s can continue to operate safely. But delivery targets appear weak.
He added, “This problem will affect deliveries of 737 aircraft in the near term, as we are conducting inspections to determine the number of affected aircraft, and to complete the required modifications to those aircraft.”
Boeing
He said. “We continue to deliver 737s that have not been affected.”
Shares of Boeing (stock symbol: BA) fell 2% in premarket trading.
Soul Aviation Systems
(SPR) fell 6%, although the supplier — which acknowledged the problem in a statement — described a more optimistic outlook for its deliveries to Boeing. “Based on what we know now, we believe there will be no material impact on our delivery scope for the year in relation to this issue,” Spirit said in a statement.
The decrease is understandable. The most likely versions of the 737 are the 737 MAX, which accounts for nearly all 737 deliveries these days. Boeing did not immediately respond to a request for comment about the affected 737 models. Investors are very much attuned to MAX’s troubles. The aircraft was grounded worldwide in early 2019 after two fatal crashes in five months. The plane returned to service in late 2020 and has not encountered any problems since then.
However, Boeing investors will have to get used to hearing more details about manufacturing. The company has made an effort to be more transparent in the wake of the MAX issue. CEO Dave Calhoun has emphasized transparency several times since taking office in early 2020 amid cap issues. Since then, Boeing has revealed more issues with its 787 and Max jets that have caused some stock volatility.
Management guidance for 737 deliveries in 2023 is 400 to 450 units. Boeing had delivered 243 aircraft through July, including 32 in July. The pace of July puts the company on track for more than 400. Investors will have to watch to see what happens to deliveries in the coming months.
Additional rework to correct problems may add to the cost, but investors may be more concerned about achieving delivery guidance than 2023 earnings. Still depressed. Boeing is expected to lose about $2.45 a share this year. Earnings are expected to turn out to be around $9 a share by 2025. Boeing earned $16.01 a share in 2018, the year before the MAX releases and the Cocid-19 pandemic.
Write to Jack Denton at jack.denton@barrons.com and Al Root at allen.root@dowjones.com
(tags for translation)Aerospace products/parts
