Why Spirit AeroSystems Shares Are Falling Today
Shares of Spirit AeroSystems (NYSE: SPR) traded down more than 10% on Tuesday morning after the company said Boeing (NYSE: BA) intends to produce far fewer 737 Max airplanes this year than what had been originally planned. Investors knew this news was coming, but the reduction was greater than many had expected.
Spirit, a onetime subsidiary of Boeing, makes fuselages and other parts for the 737 Max. The plane has been weighing on results at both Boeing and Spirit for a year now following its March 2019 grounding, but the COVID-19 pandemic with its subsequent drop in travel has further eaten into demand.
In a regulatory filing late Monday, Spirit said it received a letter from Boeing telling it to reduce its planned 2020 737 shipsets -- a term for all the parts needed to produce one airplane -- from 125 to 72. That includes the 35 shipsets Spirit has already produced and delivered.
Source Fool.com
