J.P. Morgan Research Adjusts GD/Jet Aviation Estimates

 - December 11, 2008, 10:33 AM

A recent J.P. Morgan report reassessed the effect of the acquisition of Jet Aviation by General Dynamics “in light of the tough business jet environment.” For 2009 and 2010, the report said, “We are now looking for sales [at Jet Aviation] of $1.4 billion in 2009, a bit below GD’s guidance for $1.5 billion, which had been our prior estimate. In 2010, we now foresee a 5-percent decline versus a 5-percent increase previously.” The analysis assumes that business jet deliveries will have peaked this year and thus Jet Aviation’s “completions portion of the business looks vulnerable.” According to J.P. Morgan, “Jet Aviation derives nearly half of sales from completions and refurbishments...” Although General Dynamics’s policy is not to comment on “analysts’ conjecture,” a spokesman said, “we announced in August that we expect Jet Aviation to generate approximately $1.5 billion of revenues and $230 million of EBITDA in 2009.” General Dynamics’s fourth-quarter financial results will be released on January 29, he said, and might include updates to those projections.