Cessna business jet maker fails to find lift

Textron reported a lower-than-expected quarterly profit on Thursday, hit by a drop in sales of its turboprop aircraft as well as flat deliveries of its flagship Cessna business jets, sending shares down 10 percent.

Textron delivered just 41 business jets in the third quarter ended September 29, flat compared to a year ago after growing in each of the first two quarters of this year. Turboprop sales sank to 43 planes from 57 a year earlier, reducing revenue in the company's main Aviation unit by 2 per cent and helping drag profit down to 61 cents per share, well below Wall Street's estimate of 76 cents.

Worldwide business jet sales took a hit during the financial crisis and have struggled to recover since, with 2017 aircraft deliveries only around half a peak of 1,317 hit in 2008.

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Numbers had finally begun to improve, however, driven by tax windfall handed to corporate America by US President Donald Trump in January and jet sales are expected to rise 8 per cent in 2019.

"Investor reaction to this miss likely will be keyed to management colour on aviation demand," Cowen & Co analyst Cai von Rumohr said in a note.

Sales in Textron's industrial products unit, which makes all-terrain vehicles, golf cars, and snowmobiles, fell 10.7 per cent to $930 million, mainly due to the sale of its tools and test equipment business to Emerson Electric.

Sales in the company's systems business also fell 5.2 per cent to $770m, hurt by lower deliveries of tactical armoured patrol vehicles. The unit also makes unmanned aircraft and flight simulators.

Total revenue fell about 8.2 per cent to $3.2 billion, missing analysts' average estimate of $3.53bn, according to Refinitiv data.

The company also narrowed its 2018 earnings per share forecast to a range of $3.20 to $3.30, from $3.15 to $3.35.