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Spirit AeroSystems Holdings Inc (NYSE:SPR) is up 25% on Wednesday after announcing a Memorandum of Agreement (MoA) with the Boeing Co (NYSE:BA).
Details of the Boeing-Spirit MoA
The Wichita-headquartered firm expects the preliminary agreement to help with production stability and improve deliveries moving forward. Its press release reads:
Boeing and Spirit will continue to work shoulder to shoulder to mitigate today’s operational challenges.
The announcement arrives only months after Boeing said deliveries of its 737 Max are likely to be delayed because Spirit AeroSystems has identified a new defect in the fuselages used in its best-selling plane.
Boeing is scheduled to report its Q3 results next week. Consensus is for it to lose $2.66 a share this quarter versus $6.18 per share loss a year ago. Shares of the multinational are down 20% versus their year-to-date high at writing.
Boeing has agreed to help Spirit financially
On Wednesday, Spirit AeroSystems also said that Boeing Co has agreed to raise the price per 787 unit for the near term – a move that has the potential to boost its revenue by as much as $455 million between 2023 and 2025.
The plane manufacturer will also extend another $100 million in funding to Spirit AeroSystems in the coming days for tools that are expected to help improve the rate of production, as per the press release.
Still, Spirit forecasts a hit to revenue in the current quarter due to the fuselages-related quality issues. It sees its revenue falling between $1.43 billion and $1.45 billion in Q3 versus analysts at $1.53 billion.
Shares of Spirit AeroSystems are still down 45% versus their year-to-date high.
Watch here: https://www.youtube.com/embed/jslLJA5J3VU?feature=oembedThe post Spirit AeroSystems stock jumped 25% on Wednesday: here’s why appeared first on Invezz.
