Dow Jones aviation and defense giant Boeing (BA) a discovered a defect to delay deliveries of its 737 Max jet, Bloomberg reported late Wednesday. Boeing stock slid 3% early Thursday. Supplier Spirit AeroSystems (SPR), once again the apparent source of the problem, retreated more than 12%.
The company discovered that Spirit improperly drilled holes in 737 Max fuselage components that help maintain cabin pressure. Inspections uncovered hundreds of misaligned and duplicate holes, according to reports. Still, the Federal Aviation Administration says the issue isn’t a safety threat.
Boeing said it is working to determine the impact, if any, on 737 deliveries. Is is just the most recent Spirit-related issue for Boeing, which saw production slowdowns in late June as Spirit’s mechanist union went on strike.
Boeing has produced about 38 737 Max aircraft per month this year, with a target of delivering 400-450 jets in 2023. The company plans to ramp up production to 50 737s per month in the 2025/2026 time frame, according to its Q2 earnings report from late July.
Spirit AeroSystems produces about 70% of Boeing’s narrowbody jet frames. The company also makes pylons for Airbus. Pylons connect jet engines to the airframe of the aircraft. Other major Spirit customers include Northrop Grumman (NOC), Lockheed Martin (LMT), Textron‘s (TXT) Bell Helicopter and Bombardier.
BA shares slumped 3.3%, leading the Thursday’s early declines among Dow industrials. Boeing stock is trading near the buy zone for a flat base after pushing above the 223.91 buy point on July 26. Shares are below their 21-day exponential moving average and their 10-day line.
Boeing stock has rallied 20% in 2023 through Wednesday’s close as the travel industry rebounded and jet demand rose.
SPR stock carved 12.3% lower Thursday morning following the report. Spirit stock tumbled 22.4% so far this year through Wednesday’s close. Shares are hovering near their 2023 low of 21.47 from last week.
YOU MAY ALSO LIKE:
These Are The 5 Best Stocks To Buy And Watch Now
Stocks To Watch: Top-Rated IPOs, Big Caps And Growth Stocks
Find The Latest Stocks Hitting Buy Zones With MarketSmith
Why This IBD Tool Simplifies The Search For Top Stocks
Looking For The Next Big Stock Market Winners? Start With These 3 Steps