Textron cut its profit forecast and said it would sell fewer corporate jets this year as business owners defer purchases in an uncertain US economy.
According to a Reuters report, shares of Cessna parent Textron, the world’s largest business aircraft maker, were among the biggest percentage losers on the New York Stock Exchange on Wednesday after the company’s first-quarter results missed expectations of a recovery in jet orders.
“We were hopeful that demand would recover as the impact of last year’s election and fiscal uncertainties move behind us,” Textron chief executive Scott Donnelly said on a post-earnings conference call.
Sequestration-related budget cuts, however, have put a lid on spending by many small businesses — Cessna’s main customers.
The Cessna unit delivered 32 new aircraft in the quarter to March, down from 38 units a year earlier, and Textron said it expected full-year deliveries to be lower than in 2012.
“Customers, especially in the light jet segment, tend to be small-business owners who continue to defer purchase decisions reflecting continued concerns about the financial outlook,” Donnelly said.
Shares of other corporate jet makers also fell on Wednesday.