Textron Inc expects a profitable fourth quarter for its aviation division on revived demand for private jets, after the maker of Beechcraft and Cessna planes reported a total 48% fall in quarterly profit due to the pandemic, CEO Scott Donnelly said on Thursday.
Shares in the company rose more than 7% in morning trade.
COVID-19 has battered global demand for travel, but private flights which carry fewer travelers are generally recovering faster than commercial airline traffic, fueling industry orders for pre-owned and new corporate planes.
While Cessna jet deliveries are forecast to decline by between 30% and 40% in 2020 after corporate clients canceled aircraft orders or deferred deliveries, Donnelly said he expects to see some recovery during the last three months of the year.
Textron Aviation’s order backlog at the end of the third quarter rose to $1.8 billion, from $1.4 billion during the second quarter.
NetJets, the world’s largest private jet operator, placed orders in the third quarter and will likely place orders during the last three months of the year, as Textron Aviation eyes breaking even in 2020, Donnelly told analysts.
“Certainly, we’re expecting a profitable Q4 and getting the business back to breakeven,” he said.
Textron’s business jet deliveries fell 44% to 25 planes in the third quarter ended Oct. 3, but recovered from a 50% slump in the second quarter.
The company’s net income fell 48% to $115 million, or 50 cents per share, in the quarter, but topped analysts’ estimate of 35 cents per share, according to IBES estimates from Refinitiv, partly helped by higher military sales at its Bell helicopters unit.