Spirit AeroSystems (NYSE: SPR) shares were trading lower Friday after the company said it will suspend all 737 Max production and deliveries to Boeing (NYSE: BA) effective Jan. 1 due to Boeing's suspension of production of the grounded aircraft.
Spirit Hit Hard By 737 Max Suspension
The 737 Max has been grounded worldwide in the wake of two mass fatality crashes: a Lion Air flight in Indonesia in October 2018 and an Ethiopian Airlines flight in March. Together, the crashes killed 346 people.
Revenue from 737 components represents more than 50% of Spirit's annual revenue, the company said, adding that the suspension will have an adverse impact on its business, financial condition, results and cash flow.
Spirit said it will continue to communicate with Boeing regarding the timetable for resuming production.
The company said it is evaluating all potential actions to align its cost base with the lower production levels expected in 2020.
Decisions will be guided by a focus on what is best for the long-term interests of Spirit's stockholders and other stakeholders, including employees, the company said.
Moody’s Downgrades Boeing
Moody’s downgraded its rating on Boeing’s debt on Wednesday and said it sees long-term risk to the company’s reputation due to the 737 Max production halt.
Spirit AeroSystems shares were trading down 1.84% at $73.94 at the time of publication. The stock has a 52-week high of $100.34 and a 52-week low of $64.48.
Boeing shares were trading 0.17% higher at $334.05. The stock has a 52-week high of $446.01 and a 52-week low of $292.47.