Deliveries Down, but Sales Climb at Gulfstream

Gulfstream Aerospace deliveries fell 13.3 percent in both the second quarter and the first half of this year, according to parent company General Dynamics’ second-quarter results released today. During the quarter, the company handed over 26 business jets (18 large cabin, eight midsize), compared with 30 (23 large, seven midsize) last year. First-half deliveries totaled 52 (37 large, 15 midsize), versus 60 (46 large, 14 midsize) in the same period last year.

Revenues at General Dynamics’ aerospace division, which includes Gulfstream and Jet Aviation, fell $432 million year-over-year, to $3.72 billion, in the first half. Segment earnings slid by $128 million, to $732 million.

Sales were a bright spot at Gulfstream, which reported a 1.3:1 book-to-bill ratio, boosting aerospace backlog during the quarter by about $300 million, to nearly $12.2 billion. “Demand signals were good in North America and Europe, with Asia-Pacific also rising,” General Dynamics chairman and CEO Phebe Novakovic said during an analyst conference call this morning. Gulfstream’s flagship G650/650ER “led the way” in terms of sales, she noted.

With certification now in hand, Gulfstream is gearing up to deliver the first G500s later this year, possibly as early as late in the third quarter, according to Novakovic. A contractual dispute between G500 engine supplier Pratt & Whitney Canada and Nordam, which makes the nacelle and subsequently filed for reorganization, could have “some impact” on G500 deliveries in the fourth quarter, she noted. “We expect the parties to expeditiously resolve their issues,” Novakovic said, adding, “This is all survivable…we can manage this.”