Gulfstream Aerospace delivered 38 aircraft in the third quarter, marking an 11-aircraft leap from a year earlier, but backlog and book-to-bill ebbed as deals pushed into the fourth quarter. The Savannah, Georgia airframer’s gains in deliveries helped propel revenues at General Dynamics’ (GD) Aerospace Group, which includes both Gulfstream and Jet Aviation, to $2.495 billion in the third quarter—a 22.8 percent gain.
Gulfstream’s large-cabin jets continued to account for the majority of the deliveries in the third quarter at 29, including the first of the G600s. These deliveries were up from 21 a year ago. Meanwhile, mid-cabin deliveries in the most recent quarter rose three units to nine.
However, funded backlog fell from $11.932 billion at the end of the second quarter to $11.195 billion at the end of September. Correspondingly, book-to-bill dipped to 0.7:1 for the quarter, compared with 0.89:1 a year earlier. However, with the strong orders in the earlier part of the year, book-to-bill remains at more than 1:1 year-to-date.
“Activity and interest ranged between very attractive to robust, but the process and time to closure of transactions were slower,” said General Dynamics chairman and CEO Phebe Novakovic. “We expect, as you would guess, a very strong order activity in the fourth quarter.”
Meanwhile, Novakovic outlined plans to slow G650 production as it ramps up on its newer G500 and G600 deliveries. “We've been pretty voluble about the fact that G650 production and deliveries will be reduced next year and again the following year, so that will get production and delivery consistent with current demand,” she said, but added orders have been consistent over the past three to four years.
She said these moves are separate from the newly announced G700, but did say it “has in some respects stimulated G650 discussions.” The G700 “clarifies” the G650, Novakovic said. “The G700 is in a slightly different market space, but in the same market segment as the 650. It is not a competitor. It is an alternative. It is not a replacement for the 650.”
As for the introduction the G700, which will become the new Gulfstream flagship, she would not provide details on initial order activity but said, “We've got a nice robust backlog for the 700,” adding, “This airplane is going to be very popular with that particular market segment.”
The G700 was formally unveiled last week with fleet orders for more than two dozen valued at nearly $2 billion from Qatar Airways and Flexjet.