Why Shares of Spirit AeroSystems Fell Today
Shares of Spirit AeroSystems Holdings (NYSE: SPR) lost 8.6% on Thursday as investors continue to grapple with the COVID-19 pandemic's likely impact on commercial airplane sales. Spirit, a onetime Boeing subsidiary, relies on commercial aerospace for the bulk of its revenue and is likely in for a tough road ahead.
Spirit makes airframes and other aircraft components, including the fuselage of Boeing's ill-fated 737 MAX. Commercial aerospace has been hit hard by the pandemic, with airlines grounding planes and cutting capital expenditures to save cash after seeing travel demand evaporate overnight. And even if the pandemic is contained quickly, airlines are likely flying into a recession and will be conservative when it comes to expanding their fleets.
The company is doing what it can to prepare for the storm ahead, cutting production, furloughing workers, and deferring planned capital expenditures. But there is only so much it can do. Spirit earlier this week pre-released first-quarter results, warning of a 46% drop in revenue and a loss of about $1.50 per share.
Source Fool.com
