* Third-quarter revenue falls 3.3 pct
* Income from cont ops $0.35/share vs $0.48 a year earlier
* Cuts full-year profit forecast to $1.75-$1.85/share
* Deliveries of Citation jets fall 39 pct in 3rd quarter
* Shares rise 3 pct after falling in early trading
(Adds industry analyst comment, Breakingviews column link;
By Sagarika Jaisinghani
Oct 18 Cessna maker Textron Inc's profit
fell 31 percent in the third quarter and the company warned on
business jet deliveries in 2013 as small business owners delay
Shares of the world's largest maker of business aircraft
fell 3 percent in early trading but reversed to trade up 4
percent after the company said the U.S. government shutdown
would have no impact as previously feared.
A prolonged shutdown would have put more pressure on already
weak sales as the fourth quarter generally accounts for more
than a third of industrywide business jet deliveries.
"Demand continues to be soft in the light-to-mid size
business jet segment," Chief Executive Scott Donnelly said on a
post-earnings conference call.
"Based on the current state of the business jet market, we
are taking a more conservative view of Cessna full-year
The company lowered its full-year profit forecast to
$1.75-$1.85 per share from $1.90-$2.10.
Textron, which also makes Bell helicopters and EZ-Go golf
carts, said softer margins at the Bell business also contributed
to the forecast cut.
Sales of business jets were expected to improve in 2013
after being hit last year by fears of a "fiscal cliff". However,
mandatory U.S. government spending cuts have made small business
owners - Cessna's main customers - cautious about big purchases.
"There's rumored money sitting on the sidelines, waiting for
clarity in the economy," said Jens Hennig, vice-president of
operations at General Aviation Manufacturers Association (GAMA).
Global shipments of business jets fell 4 percent to 283
aircraft in the first half of 2013, according to GAMA, which
represents more than 50 fixed-wing aviation aircraft makers,
including Cessna. (r.reuters.com/xys83v)
Deliveries of Cessna's Citation business jets fell 39
percent to 25 aircraft in the quarter. The Cessna unit incurred
a loss of $23 million as cost cutting failed to pay off.
"We'll be focusing on how demand is progressing (or not) in
Cessna, though given this performance we are not getting our
hopes up," RBC Capital Markets analyst Robert Stallard wrote in
a note to clients.
Textron said costs at its Bell helicopter business rose,
partly due to labor issues. CEO Donnelly said although these
issues had been resolved, he did not expect margins at the
mostly defense-focused unit to improve in the current quarter.
The company's income from continuing operations fell to $98
million, or 35 cents per share, in the quarter ended Sept. 28,
from $142 million, or 48 cents per share, a year earlier.
Total revenue dropped 3.3 percent to $2.9 billion.
Providence, Rhode Island-based Textron's stock was up 1
percent at $27.82 at midday on the New York Stock Exchange. It
has gained about 10 percent in the past 12 months but has
underperformed the broader S&P 500 index.
(Editing by Sriraj Kalluvila, Maju Samuel)