Spirit AeroSystems Holdings Inc , a major supplier of aircraft components to Boeing Co and Airbus , on Friday reported a higher-than-expected quarterly profit as it cut costs, and its shares rose 7.8 percent to a year high.
The company, whose profits have been hurt by cost overruns in recent years, is cutting staff this year to reduce costs. It is also selling assets such as Oklahoma operations that handle wing design for Gulfstream, a subsidiary of General Dynamics Corp , and some Boeing jets.
Chief Executive Larry Lawson, a former Lockheed Martin executive, said on Friday that Spirit is talking with potential buyers for the Oklahoma operations and added the sales process will likely extend into next year.
Spirit reported net income of $93.7 million, or 65 cents per share, for the third quarter ended September 26, compared with a loss of $134.4 million, or 94 cents a share, a year earlier.
Analysts had expected 60 cents a share, according to Thomson Reuters I/B/E/S.
Operating costs fell about 8 percent.
Airbus and Boeing expect aircraft demand to double to more than $2 trillion over the next 20 years, as emerging markets drive passenger growth and airlines in developed markets look to replace aging fleets with more fuel-efficient planes. Those trends bode well for Spirit AeroSystems, which makes fuselages and wing systems.
"We had a productive quarter as we reduced costs and remained on track for our rate increases," Lawson said.
Spirit said revenue rose to $1.5 billion in the quarter from $1.36 billion a year earlier.
Backlog rose to $38 billion at the end of the third quarter from $34 billion a year ago.
The company's shares rose as high as $29.28, before trading up $1.98, or 7.4 percent, at $28.77, at mid-afternoon on the New York Stock Exchange.
(Reporting by Rohit T. K. in Bangalore and Karen Jacobs in Atlanta; Editing by Kirti Pandey and Richard Chang)