Cessna Reports First-Quarter Operating Loss

Despite Poor Numbers, Textron Foresees Turnaround in Wichita

Cessna Citation

Cessna Citation

The lingering recession continues to make life difficult for airplane manufacturers, and Wichita giant Cessna Aircraft is no exception. Revenue at Cessna rose about 26 percent in the first quarter compared to the same period last year, but low production and delivery levels contributed to an operating loss for the quarter of $38 million. On the bright side, Cessna parent Textron said it expects the trend to reverse itself as deliveries pick up and cost-cutting measures take hold.

Textron attributed part of the loss to fewer customers cancelling aircraft orders, resulting in a reduction in forfeited deposits to boost Cessna's bottom line. Increased R&D costs also contributed to the losses, along with inflation eating into profits from the CJ4 production line, the company said. Textron CEO Scott Donnelly called the performance at Cessna "disappointing," but added that improvement is expected "as volumes recover and the impacts of our continuing cost reduction and productivity programs take effect."

There was no indication from Textron about the health of piston-engine sales in the first quarter.

Cessna delivered 31 new Citation jets in the first three months of the year, the same number as in last year’s first quarter. Revenue increased $123 million in the first quarter, reflecting a higher mix of light to midsize new jets sold.

Cessna’s order backlog at the end of the first quarter was $2.6 billion, down $293 million from the end of 2010. Textron said it expects no further significant erosion in the backlog.

Bell Helicopter, another Textron subsidiary, reported a 23-percent increase in profits compared with last year. Bell delivered 15 helicopters in the first quarter, the same as in Q1 2010. The company was buoyed by sales of 40 commercial helicopters at March's Heli-Expo Convention in Orlando, Florida. The manufacturer also said it has sold 30 Bell 407GX helicopters to an unnamed fleet customer, bringing the order backlog for the new model to 41.

Read more about the Bell 407GX in the upcoming June issue of Flying.