Benefitting from a rebounding business aviation market, Textron Aviation reported higher revenue and profit in the second quarter and the first half of 2021 driven by increased deliveries and growing aftermarket business, according to its parent company Textron Inc. The manufacturer of Cessna Citation jets and Beechcraft turboprops also expanded its backlog by $689 million to $2.7 billion, pushing backlog into the six- to nine-month range and resulting in a book-to-bill ratio “at close to two,” Textron president and CEO Scott Donnelly said on an earnings call with analysts today.
For the second quarter, the Wichita airframer delivered 44 jets (including five Longitudes and seven Latitudes), up from 23 last year, and 33 turboprops, up from 15 last year.
“In terms of new equipment, that order activity continues to be strong here as we’ve gone through the end of the quarter, so I think the sustainability appears to be quite strong,” Donnelly said on the call. “As we’ve seen through the course of the year, we have an awful lot of new customers coming to the market, which I think is great. We’ve got very low used aircraft for sale; it’s sort of record low levels, so people are coming into the market. There’s not a whole lot to be had out there in terms of quality, relatively new used aircraft, and that’s driving a lot of strength in the new side.”
Donnelly characterized the new customers coming to the market as mostly high-net-worth people as well as small business owners. In terms of sustainability in demand, he added that the company is starting to see an uptick in demand from the European and South American markets, the latter of which is “a dominant part of our turboprop market.”
Revenue for the quarter was up from a year ago by $414 million to $1.161 billion, while profit during the period was $96 million compared with a year-ago loss of $66 million. For the first half of the year, profit was $143 million on revenue of $2.026 billion versus a loss of $63 million on revenue of $1.619 billion in the same period last year. Backlog grew $1.1 billion in the first half of the year, Donnelly added.
Not only did the higher revenue reflect increased deliveries, but also growth in aftermarket sales. “Demand is there (for) flying,” he said. “If you looked at that, it is at the highest levels we’ve seen in a very long time in terms of daily utilization.”
As a result of the steadily improving financials, headcount at Textron Aviation is increasing both through recalls of laid-off workers and new hires, though Donnelly didn’t provide specific details.
Donnelly also noted on the call that Textron Aviation’s newest aircraft, the SkyCourier, has achieved more than 1,200 hours of in-flight testing and remains on track for entry into service later this year.