Textron Aviation Holds Firm on Bizjet Pricing in Flat Market

Third-quarter revenues at Textron Aviation fell $44 million year-over-year, to $1.154 billion, as it delivered 41 Citations, unchanged from a year ago, and five fewer King Airs, at 24. The Textron division recorded a profit of $93 million in the third quarter, a $7 million decrease from third-quarter 2016 due to “unfavorable performance and lower volume and mix, partially offset by a favorable impact from pricing.”

During a quarterly investor conference call this morning, Textron chairman and CEO Scott Donnelly said the business jet market is “flattish.” He also remains “perplexed” that prices of pre-owned aircraft have yet to rise despite decreasing inventories. Still, Donnelly maintained, Textron Aviation is “holding firm” on new aircraft pricing and is “willing to trade volume for price.” This has led to some loss of sales, even though he believes in-production Citations remain a “good value” at current pricing levels.

On the King Air side, Donnelly said the market for these turboprop twins is mostly international and has “felt the pain of the strong U.S. dollar.” Overall, the Textron chief expects full-year King Air deliveries to be down from 2016's.

Book-to-bill at Textron Aviation was 1.1:1 during the quarter. The backlog reflected this bump, climbing by $142 million from late June, to $1.2 billion at the end of last month.