General Dynamics’s aerospace division, which includes Gulfstream Aerospace and Jet Aviation, saw first-quarter revenues climb 19.5 percent year-over-year, to $2.125 billion, while profits soared 30.3 percent, to $404 million, from the same period last year.
Aerospace backlog ended the quarter at $14.946 billion, down from $15.622 billion at the end of last year, meaning the book-to-bill ratio was less than 1:1. “Given that the Gulfstream G650 has a four-year backlog, it’s hard to achieve a 1:1 book-to-build ratio,” General Dynamics chairman and CEO Phebe Novakovic said yesterday during a quarterly investor conference call. She noted that 60 percent of the order intake during the quarter was for the G450 and G550.
Gulfstream delivered 39 completed aircraft during the first quarter, including 33 large-cabin and six midsize jets; this is a 34.5-percent increase from a year ago, when the company shipped 29 completed jets (25 large-cabin and four midsize). Novakovic said demand for new Gulfstreams “remains strong” and noted that pricing is “holding up nicely.”
J.P. Morgan aerospace analyst Joseph Nadol III sees some risk “as Gulfstream should soon announce a major product transition from the G450/550 to a new family derived from the G650.” Backlog for the G450 and G550 is a “key watch item” as the company nears the new-product announcements, “likely in the second half,” he said, adding that he believes deliveries of the new models will begin in 2016.