Textron released their first quarter financial report on May 1, 2014 and it shows results below what analysts had forecasted, specifically:
- First-quarter revenue was $2.85 billion vs. the estimated $3.03 billion
- Adjusted earnings were $0.36 per share vs. the estimated $0.39 per share
- Profit forecast cut by 8 cents down to $1.92-$2.12 per share
With defense spending down because of the government sequester, Textron did not sell as many helicopters as predicted. While the cost of acquiring Beechcraft also contributed to lower results for the first quarter, over time the acquisition of Beechcraft should help fill the void of fewer government contracts.
Case in point: In April Beechcraft announced the sale of a Beechcraft King Air C90GTx to the state-owned Beidahuang General Aviation Company of Harbin, China.
According to the first quarter financial report, sales of King Air turboprops and new jets are up over last year:
Textron Aviation delivered eight King Air turboprops and 35 new jets in the quarter, up from 32 jets in last year’s first quarter.
Chief Executive Scott Donnelly said, Order demand was stronger than a year ago so we still expect that commercial deliveries will be up in 2014.
The company has said it expects the Beechcraft acquisition to start adding to earnings in 2015.
As airlines increase ticket prices, look for more companies to turn to jet-sharing in order to handle their own company costs associated with travel. Jet-sharing has the added benefit of no security hassles. It can be a viable option for those that require one-leg journeys and want the consistency of a quality aircraft.
Another big benefit of flying privately is the number of airports available to private aviation. There are around 500 commercial airports versus approximately 5,000 private airports nationwide in the U.S. allowing for more flexibility in destinations.