Gulfstream Aerospace delivered fewer of its recently certified flagship G700s than anticipated in the second quarter, a slower start for the ultra-long-range model as the Savannah, Georgia manufacturer reportedly works through a last-minute modification. The G700 snagged FAA certification just as the first quarter ended, with EASA approval following at a relatively quick pace in mid-May.
While Gulfstream handed over the first two G700s in April, it had only delivered eight by early July, according to aircraft brokerage Hagerty Jet Group, which added that a handful of those remain in Savannah. “In April, General Dynamics reported that they will hand over 50 or more G700s by the end of the year...which seems a bit optimistic considering that we just turned the corner on the second half of the year,” Hagerty added.
Backing this is analyst Baird, which also counted eight deliveries in the quarter. Baird now expects some earnings to shift to the back half of the year. “We are surprised by the slower-than-anticipated start for G700 deliveries with so many airframes on the tarmac ready to be handed over to customers,” Baird analyst Peter Arment said in a July 2 report made public by Seeking Alpha. “We are reducing our 2Q24 EPS estimates by $0.28 to $3.02, well below the current consensus of $3.34.”
Hagerty further pointed out, “If you travel to Savannah, it’s hard to miss the dozen or so G700s on the ramp near the air traffic control tower.” Many of those are missing horizontal stabilizers, which are being modified to meet FAA-mandated changes, according to Hagerty. Gulfstream has remained mum about these modifications, the aircraft brokerage added, saying, “We know that many of them will have their bottoms repainted in addition to some bonding work to the tails, but additional details are vague.” Gulfstream has not yet responded to an AIN inquiry about the modifications.
Hagerty also has been keeping a close eye on the G650 preowned market since G700 deliveries began, but supply thus far has remained flat. The firm traced 10 transactions involving the model. As many as five sales are further pending out of 22 on the market. This puts the available supply at 17, representing 3% of the fleet. Prices have softened and, for older models, have dipped below the $30 million mark, Hagerty said. “This is right where we were in the depths of the pandemic in late 2020.”