Textron CEO: Cessna, Beechcraft Ready for Aviation Rebound
January 22, 2014
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  • While his outlook for the general aviation market in 2014 was tempered, Textron Inc. CEO Scott Donnelly said on Wednesday that the acquisition of Beechcraft Corp. and new product development at Cessna Aircraft Co. have Textron well positioned to rise on future market growth.

    “We believe we will be in an excellent position to capitalize on the rebound in the business jet and overall general aviation market,” Donnelly said during a conference call with investors.

    Textron (NYSE: TXT) on Wednesday reported growth at Cessna in the fourth-quarter, which Donnelly said should continue in 2014 as new products — such as the company’s Citation M2 and upgraded Sovereign — get a full year of sales under their belt.

    Deliveries of both began late last year, with eight Sovereigns and 12 M2s helping add to Cessna’s fourth-quarter delivery total of 62 business jets.

    While that was nearly a 15-percent increase over deliveries in the fourth quarter of 2012, Cessna’s year end Citation deliveries were down to 139 from 189 in 2012, Donnelly said.

    And while key indicators such as the used-jet market are looking positive, Donnelly projected 2014 to be relatively flat, though new products should drive some increase in deliveries this year.

    That will include deliveries of the company’s revamped Citation X, which is expected to attain certification by early second-quarter this year.

    “These new products are the thing that will really drive growth,” Donnelly said.

    But with expected growth in the overall market still expected in the coming years, Donnelly was bullish that the company is primed to take advantage.

    With the announced $1.4 billion purchase of Beechcraft late last year, Textron will have much of the market cornered as it will bring the venerable King Air, as well as other products, into the fold.

    As for the purchase, which is expected to close in the first half of this year, Donnelly said early feedback — especially from Beechcraft’s customer base — has been “overwhelmingly positive.”

    As that purchase closes and Beechcraft is brought under the Textron umbrella, it will both substantially increase the Cessna-parent’s local footprint, and help drive the growth Donnelly foresees.

    Overall, Textron set its 2014 guidance at a 9-percent increase in revenues, up to $13.2 billion, and earnings per share between $2.00 and $2.20.

    Textron was rising in morning trading off the back of its earnings report, up about 5.4 percent to $38.05.