Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you quantify the impact from Boeing on a monthly basis and what run rate do you expect as we ramp through 2025? A: We don't know the exact impact yet. Boeing shut us down, leading to inventory accumulation. We expect them to start slow and accelerate over the year. They aim to catch up to pre-strike rates, but we'll see how realistic that is. We expect to be held at a rate that keeps us healthy but not ahead of them. The main plane affected is the 737, and we expect to resume shipments at a lower rate than the previous 32-33 ship sets a month.
Q: At the lower ship rate per month, does that impact your margins? A: It's still profitable work. Higher volumes mean higher profits, but the lower rate won't materially affect our margins across the business.
Q: Do you see cash flow or net debt improving in Q4, or will it extend until you start shipping and billing again? A: We expect continued strong cash flow into the fourth quarter. A month into it, cash flow has been very positive, and we think it will continue for the rest of the quarter.
Q: How much of your Q4 revenue forecast is new production versus retrofit or aftermarket? A: We've been running around 50/50 line fit and aftermarket. The 737 coming down might skew this towards aftermarket by $8 to $10 million if Boeing doesn't turn us back on. However, overall trends remain positive, and airline customers have been consistent with demand schedules.
Q: Is there an opportunity for IFE power products at Southwest given their cabin overhauls? A: Yes, Southwest is a major customer, and we're involved in their cabin refreshes. We developed a new architecture of C power, largely with Southwest, which is featured in their new cabins. This architecture is lighter and more cost-effective, and we've been successful selling it globally.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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