(Reuters) – Cessna business jet maker Textron Inc reported a higher-than-expected quarterly profit on Wednesday, benefiting from robust aircraft deliveries, sending its share up 1.6 percent in early trading.
Business jet demand has been growing steadily in the United States, the world’s biggest market, on the back of an expanding economy and rising corporate profits.
Textron said it delivered 44 jets in the first quarter ended March 30, up from 36 last year. Commercial turboprop deliveries rose to 44 aircraft from 29 last year.
“We think this quarter has pretty much ticked all the boxes for Textron. Aviation growth has continued, with a positive book to bill in the quarter,” Vertical Research Partners analyst Robert Stallard said.
Textron has faced delays in final certification of its newest super mid-size Longitude jet, which is expected to contribute a ‘big chunk’ to the company’s revenue growth in 2019.
Analysts have warned that the certification delays from the U.S. Federal Aviation Administration due to partial government shutdown followed by the regulator’s intense focus on re-certifying Boeing Co’s 737 MAX aircraft might impact sales growth at the company in the short.
Though the aviation business was among the drivers for a profit beat, Textron’s revenue missed Wall Street estimates, hurt by lower sales in its systems unit, which makes tactical armored patrol vehicles.
Textron re-affirmed its full-year profit outlook range of $3.55 to $3.75 per share.
Sales in the company’s aviation business, its biggest, rose 12.3 percent to $1.13 billion in the first quarter, while sales in the systems unit fell more than 20 percent to $307 million.
The company’s net income fell to $179 million in the quarter ended March 30 from $189 million a year earlier.
Textron earned 76 cents per share, above analysts’ average estimate of 68 cents, according to Refinitiv data.
Textron’s revenue fell 5.7 percent to $3.11 billion, below analysts’ estimates of $3.17 billion.
(Reporting by Divya R and Ankit Ajmera in Bengaluru; Editing by Maju Samuel)