Demand was strong «across the board» for all of Textron Aviation’s aircraft models in the third quarter of 2021, Textron Inc. CEO Scott Donnelly told analysts on an earnings call Thursday. (Photo: AIN/Barry Ambrose)
Textron Aviation reported substantial increases in revenue, profit, deliveries, and backlog during the third quarter, propelled by a higher Cessna Citation and Beechcraft King Air volume of $338 million and aftermarket volume of $62 million. The results represented what Textron Inc. CEO Scott Donnelly said on an earnings call Thursday was “very strong demand” for business aircraft. “All of the dynamics that we look at in terms of the macro-level of the market are extremely favorable,” he said.
Revenue at the Wichita airframer increased $386 million from the year-ago quarter, to $1.2 billion, while profit of $98 million erased a $29 million loss during the same period last year. Deliveries for the quarter were sharply higher, rising to 49 jets compared with 25 in last year’s third quarter. Turboprop deliveries also jumped 67 percent to 35 in the same period. For the first nine months of the year, Textron Aviation’s revenue was $3.2 billion compared with $2.41 billion in 2020 while profit was $241 million, up from a $92 million loss a year ago.
Backlog at the end of the quarter was $3.5 billion, which Jeffries analyst Sheila Kahyaoglu noted on the call was at a level last seen in 2010. Donnelly said the higher backlog—which grew by $721 million from the second quarter of 2021—supports the company’s expectations for returning in 2022 to a production level last seen in 2019.
“And there’s probably room for a little bit beyond that,” Donnelly added. What’s more, that backlog represents nine to 12 months of production. “This last decade has been unusual where you’re actually trying to build to a forecast instead,” he said. “[Nine to 12 months of backlog] is a much healthier way to run the business.”
Demand for business aircraft was strong across Textron Aviation’s entire product line, which Donnelly attributed to the numerous model upgrades the company has instituted beginning with the King Air 260 and 360 last year and more recently to the Citation M2 Gen2 and XLS Gen2 announced earlier this month at NBAA-BACE. “I would say every model is doing very well right now,” he added. “It’s really across the board.”
The company also is benefitting from new entrants to private aviation. “If I looked at the number of new customers, folks that are coming in buying a jet who have not owned a jet before, that number is probably somewhere around the 20 percent or so kind of range, which is encouraging,” Donnelly said. “For sure, we’re seeing a lot more interest and demand from those first-time buyers than we would historically see.”
Other achievements for the quarter included the Cessna 408 SkyCourier topping more than 1,600 hours of flight testing in advance of certification and first delivery expected later this year, as well as successful ground runs of the new Beechcraft Denali’s GE Catalyst turboprop engine.