Textron predicts better year in 2011
Textron, the parent company to Cessna Aircraft and Bell Helicopter, released fourth quarter 2010 results and predicted improvement in sales for 2011. Bell continued to do better than Cessna, but demand for commercial business jets has increased.
Textron Chairman and CEO Scott C. Donnelly said in a conference call Jan. 26 that officials were disappointed during the first nine months of 2010 that forecast improvement was not taking place. However, 2010 had a big finish, putting Textron forecasts back on track in the final months of the year. Cessna is ramping up research and development, a trend that will peak in 2013 when new prototypes will be ready to fly. There were few details on the prototypes, other than to say workers are being hired to support research and development.
Donnelly said Cessna is feeling the heat from Embraer, since the Brazilian company is attacking all segments of the jet market traditionally held by Cessna. For that reason, Cessna is focusing research on the mid-size jet market.
“Fourth quarter results benefited from increased demand in our commercial businesses and strong performance at Bell,” said Donnelly. “We’re particularly encouraged by the pick-up in business jet and commercial helicopter demand, driven in part by the impact of bonus depreciation in the United States, but also reflecting relative stability in global economies and improving general business confidence,” Donnelly added.
“Cessna’s revenues increased $105 million in the fourth quarter from the same period in the prior year, reflecting higher overall volume, including the delivery of 79 business jets vs. 68 last year,” the company announced. “Cessna backlog at the end of the fourth quarter was $2.9 billion, down $495 million from the end of the third quarter.” However, the segment profit “decreased $5 million, as the profit from higher volumes was more than offset by the impact of manufacturing inefficiencies related to low production levels, lower deposit forfeiture income, and higher used aircraft write-downs.”
Bell's revenues increased $173 million in the fourth quarter from the same period in the previous year. Higher deliveries of V-22 Ospreys and H-1s led to an increase of $54 million in U.S. government revenues. Commercial revenues increased $119 million, primarily because of higher aircraft deliveries and pricing, Textron said. The segment profit increased $54 million, “primarily due to of improved performance and pricing in excess of inflation.” Bell’s backlog increased $661 million from the end of third quarter to the end of the fourth quarter to a total of $7.2 billion.
January 26, 2011