U.S. manufacturers bullish
The bull is back, or at least it appears to be. After watching business aviation limp along for the past three years, executives at Textron, General Dynamics and Raytheon are now optimistic that the industry is on the rebound.
General Dynamics’ Gulfstream subsidiary contributed $94 million to its parent company’s bottom line in the second quarter, more than double the amount in the same period last year. Furthermore, executives at the parent company said initial third-quarter sales at Gulfstream seem to be “super heated,” with demand picking up sharply during the current quarter and a vibrant sales pipeline “like we’ve never had before.”
Textron executives are equally confident about the rosy business aviation picture, despite the fact that second-quarter revenues at Cessna were down 13 percent from last year. The Wichita-based aircraft manufacturer’s revenues and profit declined $75 million and $22 million, respectively. However, Textron execs noted that business jet sales are strong, with orders for 72 Citations logged in the second quarter.
Raytheon is equally hopeful: its Wichita-based Raytheon Aircraft is expected to make a profit of about $30 to $35 million this year (it posted $1 billion in losses between 1998 and 2002). The aircraft manufacturer has seen “a good six to eight months of a strong aviation market,” and buyers are beginning to place orders for next year. Raytheon chairman and CEO Bill Swanson was “especially pleased with the [second-quarter] performance of Raytheon Aircraft,” which had second-quarter net sales of $570 million, up from last year’s $540 million; and it posted a $23 million profit during those three months, compared with $12 million a year ago.