Low production and delivery levels led to an operating loss at Cessna Aircraft Co. in the first quarter of the year, but brighter times are ahead as volumes recover and the effects of cost-cutting take hold. Revenues were higher, but so were operating losses.
Scott Donnelly, chairman and CEO of parent company Textron, called the operational performance at Cessna “disappointing.”
Cessna delivered 31 new Citation jets in the quarter, flat when compared to deliveries for the first quarter a year ago. Revenues increased $123 million, reflecting a mix of light to mid-size jets and higher used-jet deliveries. The segment loss increased $14 million, because the higher revenues were more than offset by lower income from deposit forfeiture due to order cancellations, higher engineering and development costs, and inflation. Inflation in costs from suppliers is eating into profits from the new Cessna CJ4 production line. Cessna officials are negotiating with suppliers. Cessna’s backlog was $2.6 billion, down $293 million from the end of 2010.
There was no indication from Textron as to how piston-engine sales did in the first quarter.
Bell Helicopter revenues increased $131 million in the first quarter, compared to the first quarter of 2010. Military deliveries were up, but commercial deliveries were flat compared to 2010. Higher military production and deliveries more than offset increased research-and-development costs. The backlog was $7.3 billion, up $119 million from the end of 2010.