One Analyst Says There Are Signs From The Supply Chain That The Answer Is 'Yes'

A financial analyst says that Textron's piston and turboprop business may be headed for a slide, given reports from glass cockpit makers Garmin Aviation and Rockwell Collins.

The Wichita Eagle reports that Wells Fargo Securities senior analyst Sam Pearlstein said that Garmin Aviation told investors Monday that it expects sales to be flat year-over-year because of weakness in the GA market, and Rockwell said last month that it is anticipating a decline in deliveries compared to 2014.

Because of those indicators, Pearlstein wrote that he was lowering estimates for sales of piston and turboprop airplanes for 2016.

Textron, meanwhile, reported revenues at Textron Aviation were up $79 million, primarily reflecting higher jet and military volumes in its quarterly report released Tuesday. Textron Aviation delivered 37 new Citation jets and 29 King Air turboprops in the quarter, compared to 33 Citations and 30 King Airs in last year’s third quarter.

Textron Aviation recorded a segment profit of $107 million in the third quarter compared to $62 million a year ago. The increase is primarily due to the higher volumes and mix and improved performance, which included lower amortization of $9 million related to fair value step-up adjustments.

Textron Aviation's backlog at the end of the third quarter was $1.4 billion, approximately flat with the end of the second quarter.

Bell revenues decreased $426 million, primarily the result of lower V-22 aircraft deliveries, lower commercial aftermarket volume and a change in mix of commercial aircraft. Bell delivered 4 V-22’s and 5 H-1’s in the quarter, compared to 12 V-22’s and 4 H-1’s in last year’s third quarter and 45 commercial helicopters, compared to 41 units last year.

Segment profit decreased $47 million primarily due to the lower volumes partially offset by favorable performance.

Bell's backlog at the end of the third quarter was $5.1 billion, up $338 million from the end of the second quarter.

FMI: Textron Quarterly Report