Gulfstream Aerospace marked one of its strongest sales quarters in the past two years, reaching a book-to-bill of 1.34:1 in the first three months, parent company General Dynamics (GD) reported today. At the same time, the aircraft manufacturer had a five-unit jump in deliveries, to 28, with large aircraft driving that improvement. Savannah, Georgia-based Gulfstream handed over 25 large aircraft in the first quarter, up from the 20 a year earlier, as well as three midsize G280s, unchanged from a year ago.
As a result, revenues at GD's aerospace group—which includes Gulfstream and Jet Aviation—increased 11.6 percent from $1.691 billion in first-quarter 2020 to $1.887 billion in the most recent quarter. However, aerospace earnings fell by $20 million in the quarter, to $220 million, reflecting a write-down involving G500 test aircraft.
Further, GD chairman and CEO Phebe Novakovic cautioned that the second quarter would be the most “challenging” in terms of deliveries, but that she expected a “rapid improvement” in the third and fourth quarters as production increases.
As for the orders, Novakovic noted that the only sales quarter to eclipse the first quarter at the aerospace division in the past two years was the end of 2019 when Gulfstream had rolled out the G700. Taking in $2.457 billion in orders in the first quarter, the funded backlog for the aerospace group grew from $11.308 billion at the end of 2020 to $11.545 billion. Including Jet Aviation, the aerospace group’s book-to-bill for the quarter was 1.3:1.
Noting that the aerospace group’s performance eclipsed the corporation’s own expectations, Novakovic said sales picked up notably in mid-February and continued throughout the quarter and appear to have continued into the second quarter. Encouragingly, she added, this sales momentum has occurred while many countries have kept travel restrictions in place, leaving the company well-positioned for when restrictions ease globally. “Demand should improve even further when these restrictions are ultimately removed,” she added.
The U.S. accounted for half of the sales and Novakovic said this activity came from a broad customer base representing a range of buyers. This included Fortune 500 companies, which are increasingly reentering the market, she said.
Meanwhile, Gulfstream’s service revenues saw a 5.7 percent increase. Jet Aviation, however, has been slower to rebound, with revenues down $31 million, but Novakovic said this was not unexpected given the dip in flight hours during the pandemic.