Why Spirit Aerosystems (SPR) Is Down Today

NEW YORK (TheStreet) -- Spirit Aerosystems (SPR) fell 18.3% to $27.02 Thursday after reporting a loss in its fourth-quarter earnings report.

For its fourth quarter, Spirit posted a net loss of $587 million, or $4.15 a share, compared to a profit of $61 million, or 43 cents a share, in the year-ago quarter. Revenue rose 5% in the quarter to $1.49 billion.

The loss in the quarter is partly due to a $546 million charge related to its Boeing (BA) 787 program. Spirit produces the fuselage for the Boeing 787 Dreamliner.

Looking ahead, Spirit said it expects earnings between $2.50 and $2.65 a share for 2014. Analysts estimate earnings of $2.68 a share for the year.

Must read: Spirit AeroSystems Holdings (SPR) Is Today's Water-Logged And Getting Wetter Stock

TheStreet Ratings team rates SPIRIT AEROSYSTEMS HOLDINGS as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate SPIRIT AEROSYSTEMS HOLDINGS (SPR) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SPR's revenue growth has slightly outpaced the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 10.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 169.7% when compared to the same quarter one year prior, rising from -$134.40 million to $93.70 million.
  • Net operating cash flow has significantly increased by 80.13% to $185.00 million when compared to the same quarter last year. In addition, SPIRIT AEROSYSTEMS HOLDINGS has also vastly surpassed the industry average cash flow growth rate of -9.48%.
  • The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • Powered by its strong earnings growth of 169.14% and other important driving factors, this stock has surged by 112.14% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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