Boeing shares drop 5% amid supply chain shortages

Airplane fuselages bound for Boeing's 737 Max production facility sit in storage behind Spirit AeroSystems Holdings Inc headquarters, in Wichita.

A fractured supply chain forced the aerospace parts maker to hold onto inventory as a result of a higher than expected cash burn in the fourth quarter, according to a report by Reuters- Spirit AeroSystems Holdings Inc.

In light premarket trade, the share price of Boeing was down 5% to $32.60.

Supply and labor shortages have capped output at both aircraftmakers, although Boeing and Airbus SE have been benefited by a recovery in air travel.

That has left suppliers such as Spirit with more parts un sold, hurting cash flow and crimping their recovery from the COVID-19 pandemic.

Spirit Chief Executive Tom Gentile said that 2022 was a challenging year for the entire industry as they worked through supply chain part shortages and labor attrition, which impacted overall deliveries and profitability.

The company reported a quarterly cash burn of $66 million, compared to analysts' estimates of $42.64 million, according to Refinitiv data.

A quarterly shipset delivery for Boeing was 103 versus 71 last year. Shipset deliveries for Airbus were 177 against 164 last year. A shipset refers to sets of structural fuselage components produced or delivered for one aircraft.

Spirit reported a loss of $243.1 million, or $2.32 per share, for the quarter ended December 31 against a loss of $120.3 million, or $1.15 per share, last year.

Revenue went up by 23% to $1.32 billion in the quarter.