An unexpected slide in King Air deliveries pushed Textron Aviation’s revenue and profit lower in the first quarter of 2017.
The Wichita-based maker of Cessna and Beechcraft planes reported profit of $36 million on revenue of $970 million in the three-month period ended March 31, a nearly 50 percent decline in profit and 11 percent drop in revenue from the same period last year. Backlog was flat at $1 billion.
While Cessna Citation business jet deliveries were up by one jet to 35 in the quarter, King Air turboprop deliveries totaled 12, down 53 percent from the first quarter of 2016.
On a conference call with analysts Wednesday, Textron Inc. CEO Scott Donnelly said a stronger U.S. dollar and economic conditions overseas impacted sales of Beechcraft’s iconic twin turboprop. That’s because the airplane is “traditionally an international product” and where “usually half of its sales” come.
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Still, Donnelly added, “we feel like we can get to where our original plan is” for total King Air deliveries in 2017. Donnelly wouldn’t specify a delivery number, referring instead to the company’s earlier King Air delivery guidance for 2017, which was expected to be flat to 2016’s total of 106.
Deliveries were also sharply lower on its Beechcraft T-6 Trainer. That wasn’t unexpected given that Textron Aviation wrapped up deliveries last June of the military airplane to the Navy and Air Force under the Joint Primary Aircraft Training System program.
“The T-6s … it’s going to be a pretty tough year (for), but we always understood that,” Donnelly said.
He expects the company to deliver between 10 and 12 T-6s in 2017. That compares with 38 deliveries in 2016.
Profit at Textron Aviation also was impacted by higher spending on the Scorpion military jet program. Donnelly said a third production-conforming Scorpion is in final assembly, in preparation for an upcoming Air Force evaluation of close air support aircraft to augment its aging A-10 fleet. The company is also submitting an attack version of the Beechcraft trainer, an AT-6, in that evaluation that Donnelly expects to begin late this summer or early fall.
The lower results at Textron Aviation also affected Textron Inc.’s financial results for the quarter. It reported revenue of $3.1 billion and net income of $101 million, both of which were down 3.4 percent and 33 percent, respectively.