But given the slower market and delays in certification of the M2 and Sovereign, Donnelly was hesitant to say that Cessna would break even in the third quarter, saying only that it is the company’s goal to break even this year. In light of the certification delays, which are also pushing the Citation X to early 2014, Cessna is lowering its revenue estimates for the year to $3 billion, just below the 2012 level.
But Donnelly notes that despite the market, Textron is satisfied that Cessna is taking the necessary steps to weather the decline and prepare for an eventual upturn. “The Cessna team out there is doing a heck of job in a pretty tough environment,” he says. “They have driven a lot of cost productivity.” While he concedes “we can’t possibility be happy about anything that has a red number associated with it,” Donnelly adds Cessna executives have worked to drive productivity and invest in new products at the same time.
Cessna affiliate Bell also turned in a slower performance, with revenues sliding $31 million, reflecting the delivery of three fewer commercial aircraft in the second quarter (44). Segment profit was also down $17 million due to an “unfavorable” mix and fewer commercial deliveries. Backlog also fell in the quarter, down $137 million to $6.95 billion.