(Reuters) -Spirit AeroSystems reported a higher first-quarter cash burn on Tuesday, squeezed by lower 737 production at the aerospace supplier’s biggest customer, Boeing.
Cash burn was $444 million for the three months ended March 28, compared with $69 million a year earlier, the Wichita, Kansas-based company said.
Shares of the beleaguered supplier fell 4% before the bell.
The Federal Aviation Administration’s (FAA) ramped up quality checks have pushed 737 MAX production much below the 38 per month cap the regulator had imposed, Reuters reported last month.
The restriction followed a Jan. 5 mid-air door plug blowout on a 737 MAX 9 jet, the fuselage for which was made by Spirit Aero.
Compounding Spirit’s cost concerns, the planemaker has clamped down on traveled work – a practice of completing work on a production line out of the ordinary sequence – and has said it would take only fuselages that are adhere to quality standards.
Spirit has not reported an annual profit since 2020 following two fatal 737 MAX crashes and the pandemic-induced slump in travel that hit other Boeing suppliers.
The company makes of 70% of the 737 jet, Boeing’s cash cow. Sales to the U.S. planemaker accounted for 64% of Spirit’s revenues last year.
Meanwhile, Boeing’s talks to acquire the company has hit a hurdle after Spirit Aero customer Airbus has called for financial compensation to take on the money-losing operations, Reuters reported last week.
Shares of Spirit have gained 3.9% this year, while those of Boeing have fallen 31.6%.
(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Sriraj Kalluvila)
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