Cessna Downgrades 2013 Delivery Forecast
Textron, parent company of Cessna Aircraft, held its first-quarter 2013 earnings call yesterday, and the news was not particularly uplifting for its Wichita-based business segment. Customers in the light jet market, who tend to be small business owners, continue to defer purchase decisions, “reflecting continued concerns about their financial outlook,” said Textron chairman and CEO Scott Donnelly. As a result, he continued, Cessna delivered 32 new jets in the first quarter, six fewer than the same quarter last year, “resulting in a segment loss in the quarter of $8 million.”
On a more positive note, the company continues to see good volume in the used-aircraft market. This led to “a significant increase in used jet sales, which resulted in higher overall Cessna revenue, despite lower new [aircraft] deliveries.”
Nevertheless, looking forward at a lack of recovery in the business jet market, Cessna is reducing its 2013 business jet deliveries outlook and now expects deliveries will be down this year compared with last year. As a result, said Donnelly, the Wichita-based manufacturer has adjusted its production schedules and is implementing other appropriate cost actions.
In addition, he added, “We’ve initiated a salary workforce reduction program, the largest portion of which is a voluntary separation plan.”
In the long term, however, Cessna believes the global business jet market has significant growth potential and the company remains “committed to our new product plans, which include introduction of the M2 and the new Sovereign and Citation X later this year as well as the Latitude in 2015 and the Longitude in 2017.”