Cessna revenue down for fourth quarter; up for all of 2012

Cessna Aircraft recorded $901 million in revenue for the fourth quarter of 2012, down $110 million from the same time a year ago because of lower jet deliveries.

Profit for the quarter totaled $23 million, down from $60 million for the same period a year ago.

The results include a $27 million charge related to an award against Cessna in an arbitration proceeding, the company said.

Cessna delivered 53 new Citation jets during the quarter, compared to 67 a year ago, a decrease of 21 percent.

With uncertainties from the presidential election and worries about the fiscal cliff, Cessna saw “unusually slow business jet demand” in the last three months of 2012, Scott Donnelly, chairman and CEO of Textron, Cessna’s parent company, told analysts on a conference call Wednesday.

The first half of 2012 was stronger, but the second half was weaker than expected, Donnelly said.

Profit and revenue for the full year at Cessna were up, however.

Cessna recorded $3.1 billion in revenue for 2012, an increase from $3 billion in the prior year, and profits totaled $82 million, up from $60 million

The company delivered 181 Citation jets during 2012.

Cessna expects 2013 deliveries to rise modestly from last year, especially in the later part of the year as the company delivers new jet models, such as the Citation M2 light jet.

Cessna’s order backlog at the end of the fourth quarter totaled $1.1 billion, down $267 million from the end of the third quarter last year.

A degree of uncertainty remains in the market as Washington works through its fiscal challenges, Donnelly said on the call.

The good news is that the market for used aircraft is doing OK, he said. Cessna is taking a fair amount of trade-ins to help customers buy new jets.

Cessna is selling those jets in one to six months, Donnelly said, which is good, although there are “zero margins” in the planes.

At the same time, the company is doing a “nice job” bringing down costs and increasing efficiencies, Donnelly said.

Cessna built some jets in the latter part of 2012 expecting them to be sold before year end. Donnelly declined to say how many were in inventory. Those planes will be sold and delivered this year.

“These are perfectly good aircraft, and we are selling them as we speak,” he said.

So far this year, order activity has been up compared to previous Januarys, Donnelly said.

Textron recorded $3.36 billion in the fourth quarter, up from $3.25 billion and posted net income of $148 million, up from a loss of $19 million in the fourth quarter of 2011.

For the full year, Textron posted $12.2 billion in revenue, up from $11.3 billion in 2011. Net income for the year totaled $589 million, up from $242 million in 2011.

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