<< Previous   of   Next >> Spirit AeroSystems  (click to enlarge) The forward section for Boeing's first 787 Dreamliner passed structural tests in February 2007 at the Spirit AeroSystems plant in Wichita, Kan.

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Boeing 787 supplier Spirit AeroSystems' profits up

Profit rose 9 percent in the first quarter, but the Wichita, Kan.-based company lowers its projected revenue for 2008.

By Michelle Dunlop
Herald Writer

EVERETT -- Spirit AeroSystems, a key supplier for the Boeing Co.'s 787, reported a 9 percent increase in first-quarter revenue despite delays on the Dreamliner program.

The Wichita, Kans.-based supplier lowered its 2008 projected revenues from $4.8 billion to $4.4 billion because of Boeing's setbacks on the 787. Boeing initially was to pay Spirit for 787 sections when the jet maker delivered its mostly carbon fiber composite aircraft to customers. The two companies have negotiated a new payment plan following the roughly 18-month delay in the Dreamliner's first delivery.

"In the first quarter we aggressively began taking steps to mitigate the impact from slowing 787 production," said Jeff Turner, Spirit's chief executive officer. "Today, we are continuing to implement the revised Boeing production and delivery schedule, and we are reflecting the financial implications of the revised schedule in our outlook."

Boeing originally planned to hand over the first Dreamliner next month to All Nippon Airways of Japan. Earlier this month, after previous delay announcements, Boeing again revised the 787 schedule. The company intends to put the first 787 into flight test in the fourth quarter of 2008, with first delivery scheduled for the third quarter of 2009.

Parts shortages, complications with Boeing's worldwide supply chain and difficulty in assembling the first 787 have been blamed for the delay. Boeing officials said this month that they hope to deliver 25 Dreamliners by the end of 2009, down from 112 as originally scheduled.

Spirit officials declined to predict the number of 787 ship sets that the company will deliver to Boeing this year. Boeing has agreed to pay Spirit when components arrive in Everett, where the 787 goes through final assembly, rather than when the completed 787s are delivered.

Spirit, which also builds parts for Boeing rival Airbus, said its backlog has grown to $27.5 billion, thanks in part to the 892 orders for Boeing 787 jets.

Spirit shares rose nearly 4 percent Tuesday to close at $28.64. Boeing's stock basically has been rising since the company confirmed the third major Dreamliner delay in early April. Shares closed up 55 cents at $85.53.

Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com