WICHITA, Kansas — A half billion dollar loss in one quarter isn’t the news you would want to hear from one of the biggest employers in Wichita but that is what we are seeing from Spirit today.
With more than 10,000 employees in the mix, a lot of people are paying attention to those financial disclosures today.
In 2012, Spirit Aerosystems had a profit of more than 60 million dollars in the fourth quarter. Today the company announced a loss of 587 million dollars in the fourth quarter of 2013. Analysts are saying if things don’t change soon, it could be bad for the company.
But Spirit officials say a fourth quarter loss is not the whole picture of their business.
It has been a challenging year of transition for Spirit Aerosystems getting a new CEO and trying to grow as a company.
It is discouraging news that some analysts say they have seen coming.
“While the company has an excellent portfolio for existing business particularly the 737s, it’s ability to turn new programs into profitable ones is still under a lot of question,” said Richard Aboulafia, Teal Group.
“They’ve said this for the last 3 or 4 years and every year it’s a reported forward loss and it’s significant. We’re not talking a few dollars, we’re talking hundreds of millions they’re now well over a billion in forward losses,” said Bob Brewer, the SPEEA Midwest Director. “The company, the community, absolutely hope this gets fixed, I’ve heard people use the term ‘death spiral’.”
But Spirit officials say there is a lot more to the overall health of the company than one quarter’s profits or losses.
A Spirit spokesperson told me over the phone there is an estimated 41 billion dollar demand for product, combined with new CEO Ty Lawson’s push for data-driven information is a recipe for success.
At this point, Spirit officials say there is no reason to suggest that jobs may be on the line.
“I don’t think there is a panic button that needs to be hit. That’s my personal opinion, but I think there’s valid concern about where the company is headed and I’m certainly hoping that Mr. Lawson is the person that’s going to turn that ship around and get it put in the right direction,” said Brewer.
Officials with Spirit say it could be a few years before the full picture could be seen saying that this phase the company is in relies heavily on investments and once the program has matured we will be seeing more return.