Textron Aviation Q2 Deliveries, Revenue Drop

 - July 17, 2019, 10:46 AM
Type certification of the Cessna Citation Longitude is expected in the third quarter of 2019, Textron Inc. CEO Scott Donnelly told analysts on a conference call today. (Photo: Textron Aviation)

Textron Aviation saw a surprising drop in turboprop and jet deliveries in the second quarter, leading to a 15 percent decline in revenue, parent company Textron announced today. In all, the Wichita-based manufacturer of Beechcraft and Cessna aircraft delivered two fewer business jets and 14 fewer turboprops from second-quarter 2018, leading to a $153 million decline in revenue, to $1.1 billion. Despite the lower deliveries—46 jets and 34 turboprops—its quarterly profit increased by $1 million from a year ago.

The company saw lower order activity beginning in late May across its product line “largely attributable to the uncertainties around tariffs and concerns about economic growth,” Textron Inc. CEO Scott Donnelly told analysts on a conference call, specifically citing President Donald Trump’s threat of higher tariffs on products from Mexico. “There was a couple of specific transactions where customers that do a lot of business in Mexico and their business is dependent on that, and they got pretty rattled,” he explained. “This kind of came as quite a surprise and of course now it’s also gone away. But...there were very specific transactions that stopped because of that.”

Those concerns have since eased and a combination of positive economic indicators, along with the Federal Reserve signaling a cut to interest rates, suggest a better quarter ahead. “Our view going into the third quarter remains positive, and we expect deliveries and orders to ramp throughout the second half of the year driving revenue growth at [Textron] Aviation,” he said.

Donnelly added that Cessna’s super-midsize Citation Longitude remains on track for type certification in the third quarter.