Recovery seen in late 2010

January 28, 2010

Cessna Aircraft’s parent company, Textron, said aircraft sales would improve in the second half of this year, although totals will fall below 2009 levels. Cessna’s revenues decreased $642 million in the fourth quarter of 2009 compared with the corresponding period of 2008, because of lower volumes.

Cessna will increase research and development spending on upgrades to existing models, and even work on unannounced models to be introduced when the market improves.

Textron estimates 2010 revenues will be approximately $10.8 billion, reflecting top-line growth in its Bell, Textron Systems, and Industrial segments, partially offset by decreases in revenue at Cessna and Textron Finance.

Cessna was able to limit losses through lower selling and administrative expenses, largely because of workforce reductions in 2009, the benefit of forfeiture income from order cancellations, and a decrease in write-downs of pre-owned aircraft inventory. The largest order cancellation came from a single customer and amounted to $1.7 billion. Used aircraft prices were mostly flat with a few bright spots for some models. Aircraft usage by customers increased slightly.

For the year there were 289 deliveries including 125 Cessna Mustangs. That is down significantly from the previous year’s 467 aircraft. In 2010, it is expected there will be 225 deliveries including 105 Mustangs.

Cessna’s backlog at the end of the fourth quarter was $4.9 billion, a decline of $2 billion from the third quarter.

Bell Helicopter’s revenues decreased $51 million in the fourth quarter because of lower sales volume, partially offset by higher pricing. Bell also is owned by Textron. Bell’s backlog at the end of the fourth quarter was $6.9 billion, up $1.3 billion from the end of last quarter primarily driven by the V-22 program.