Textron Aviation: 1Q King Air Shipments Fall, Jets Flat

 - April 19, 2017, 11:22 AM
During the first three months, Textron Aviation handed over 12 Beechcraft King Airs, down from 26 in that same time last year, as the strong U.S. dollar weighed on international sales of the turboprop twins. It also delivered 35 Citations in the quarter, one more versus a year ago. (Photo: Textron Aviation)

Beechcraft King Air deliveries fell 54 percent year-over-year in the first quarter as the strong dollar weighed on international sales, while Cessna Citation shipments remained largely flat over the comparable periods, Scott Donnelly, chairman and CEO of parent company Textron, said this morning during an investor conference call. During the first three months, Textron Aviation handed over 12 King Airs, down from 26 in that same time frame last year, and 35 Citations, one more compared with a year ago.

According to Donnelly, demand has not diminished for King Airs; instead, international buyers, who typically account for more than half of the sales of the turboprop twins, have deferred purchasing plans due to unfavorable currency exchange rates. “They’ve tried to beat us down on price, but we held the line. We know the aircraft is the right one for their mission, so they’ll be back,” he said. “I’d rather turn down a sale [at a discounted price] than sell at too low of a margin.” For the full year, Donnelly expects King Air deliveries to be on par with the 106 shipped in 2016.

First-quarter revenues at Textron Aviation skidded $121 million from a year ago, to $970 million, in part due to lower King Air volumes, while profits were halved, to $36 million, due to lower volume and mix. Backlog at the aviation unit was $1 billion as of March 31, largely unchanged from December 31.