Spirit AeroSystems Holdings Inc. (SPR), which supplies and makes parts for Boeing Co. (BA) and Airbus Group NV (AIR), rose the most in almost six years after it boosted its full-year profit forecast amid strong demand for planes.
Shares in the Wichita, Kansas-based company rose 13 percent, the most since October 2008, to $36.84 in New York, swinging to an 8.1 percent gain for the year.
Spirit increased its 2014 earnings-per-share forecast to $2.90 to $3.05, up from $2.50 to $2.65. It also boosted its sales projection to $6.7 billion to $6.9 billion, up from $6.5 billion to $6.7 billion.
“The current performance and likelihood of continued execution in the coming quarters should support a higher stock valuation,” said Peter Arment, an analyst at Sterne Agee, in a note to clients following the results. He rates the stock buy.
Spirit is benefiting as Boeing and Airbus hold a record backlog of orders for about 11,000 aircraft, according to data compiled by Bloomberg Intelligence. Popular models, including Boeing’s carbon-fiber 787 Dreamliners, are sold out through the end of the decade.
Spirit Chief Executive Officer Larry Lawson said the fundamentals in the airplane market are strong. The industry has an annual growth rate of 5 percent in travel and a global fleet of 22,000 jets with a replacement rate of 1,000 planes a year, he said.
“It doesn’t appear that the cost of fuel will make a leap down, so the motivation to buy aircraft with lower operating costs is high,” Lawson said on a conference call with analysts. “The market looks good and we feel very good about our value proposition.”
Spirit posted earnings per share of $1.01 in the second quarter, beating analysts’ average estimate of 68 cents. Sales grew 19 percent to $1.8 billion.
Spirit’s wing systems segment made an operating profit of $71 million in the second quarter compared with a $402 million operating loss a year earlier.
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