Why Spirit AeroSystems Holdings, Inc. Slumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of aerospace company Spirit AeroSystems Holdings  (NYSE: SPR  ) sank 17% today after its quarterly results and outlook missed Wall Street expectations.

So what: The stock has soared over the past year on a string of better than expected quarters, but today's Q4 results -- loss of $586.9 million on a revenue increase of 4.8% -- coupled with downbeat guidance is forcing Mr. Market to sober up. Management cited charges related to the 787 program, as well as the establishment of a valuation allowance against deferred tax assets, for the big loss, triggering plenty of concern among investors over its bottom-line growth going forward.

Now what: Management now sees 2014 full-year EPS of $2.50-$2.65 on revenue of $6.5 billion-$6.7 billion, versus the consensus of $2.68 and $6.61 billion. "We're better positioned to move forward as we ramp up alongside our customers to all-time historical highs in commercial aircraft production rates," President and CEO Larry Lawson reassured investors. "We are entering 2014 with a strong cost discipline and relentless focus on performance and accountability that should begin to yield consistent cash generation." More important, with the stock now off 25% its 52-week highs and trading at a forward P/E of 10, Mr. Market might be offering a good chance to buy into that bullishness.

More compelling ways to grow
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2826806, ~/Articles/ArticleHandler.aspx, 4/20/2014 3:24:31 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement