Reversal of fortune at Textron’s aero units
Textron issued its second quarter report for 2010 yesterday and news from its aviation segments was mixed.
At Cessna Aircraft, revenues decreased $236 million in the second quarter, primarily reflecting lower new-aircraft deliveries, including 43 Citations, compared with 84 for the same period in 2009. Of the 43 deliveries, 20 were Citation Mustangs.
Segment profit at Cessna decreased $45 million, “due to lower volume and a reduction in deposit forfeiture income, partially offset by lower used aircraft write-downs, inventory reserves and selling and administrative expenses.”
According to Textron president and CEO Scott Donnelly, Cessna experienced “a number of cancellations, including a large Mustang cancellation from a European operator.”
Gross orders, he said, increased from the first quarter, mostly in the light to midsize aircraft segment. However, the 2010 Mustang delivery forecast has been reduced to about 70 units, resulting in a production adjustment. With respect to light and midsize jets, he said that Cessna continues to evaluate how the economic recovery will affect demand. And he expressed hope for passage of the bonus-depreciation bill in the U.S., and stabilization of the European credit market, both of which would contribute to an improved environment for business jet orders. He concluded that 2010 will be a “trough year” for Citation deliveries.
According to the report, Bell Helicopter had a good quarter, driven primarily by military deliveries of the V-22 and H-1. The books show Bell revenues increased $153 million in the second quarter, with segment profit up $36 million.
On the commercial side, Bell delivered 21 commercial helicopters in the second quarter, up from 15 in the first quarter 2010.
Donnelly said “good progress” is being made on the Bell 429 light twin program. And he noted that Bell expects to deliver 75 Bell 429s by the end of 2011.
The total backlog value at Bell increased by $200 million from the end of the first quarter to total $7.1 billion. “The overall outlook and beyond at Bell,” concluded the report, “is very good.”