Spirit AeroSystems Exec Insights: Earnings, Tornado Activity
On Thursday, Spirit AeroSystems Holdings, Inc. (NYSE:SPR) reported its first quarter earnings and discussed the following topics in its earnings conference call. Here’s what executives shared.
Robert Spingarn – Credit Suisse Securities: Phil, it was discussed last quarter on the call that your earnings power appeared to be something in the neighborhood of $2.40 for this year and that your guidance of $2 to $2.15 provided some cushion for potential negative accum catches and with the results today this essentially confirms this thinking $0.52 GAAP, $0.58 without the accum catches. So that being the case can you offer some specific color on the remaining swing items among the development programs and their relative sizes?
Philip Anderson – SVP and CFO: Sure, Rob. I think the risk profile on the development programs is essentially what I think we described last quarter, because 787 is a big program which we are doing pretty well on. So I think that’s important to note but again it’s a big program for us. We are still booking under the zero gross margins but on plan at the end of the first quarter here in 2012. The other programs I think the A350 wing program given it’s early in this development cycle or maybe first round of engineering here, it’s fairly thinly margin right now. So I think that continues to be a lot challenging for us again don’t expect big numbers out of that effort. The G280 is certainly as it moves into production it is something we are watching closely is supply chain challenges are there, they remain there. And I think as we through this year that will become clear and I think we did quite a bit of work in the first quarter and we didn’t quite get to where we did on some of those supply chain items. But there is still lot of work to do there on that program. With the expectation of exiting 2012, with a very holistic view of the program. 747 the wing again that program continues to be challenging for us I don’t see big numbers coming out of it, but again its some risk as we move through manufacturing with the redesign 747-8 Intercontinental and freighter. So I think those are the usual suspects we’ve been talking about for quite some time. And we’ll just have to keep working on them really hard, as we move through the year and go from there.
Carter Leake – BB&T Capital Markets: What is your (lean) on the comment with regard to the tornado activity? If I hear you right from a delivery perspective you think, you will be able to recover by the end of the year but still there could financial impact could you clarify some of that perhaps speaking to insurance coverage or consequential damages or put some color on to that comment?
Jeffrey L. Turner – Director, President and CEO: So, let me start Carter. First of all, I think, it’s really important to realize that the way that team responded is going to we believe in the way we are executing the plan is going to keep all the deliveries as we said in the year, frankly if we hit all of our plants, we’ll be keeping them in the quarter, but there are several outlying areas that have taken a little extra time to get our plants solid. Obviously, it’s an area of intense activity for us. We have extensive insurance coverage, but it does take some time to work through all the implications of that and you can imagine with the loss itself and the operational disruption issues and multiple carriers. So we are being somewhat cautious in projecting that, and we will have a pretty clear view as we come through the second quarter.