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Gulfstream records modest rise in third quarter deliveries

Gulfstream delivered 30 business jets during the third quarter, one more unit than the same period last year, and is on track to hand over 120 aircraft in 2017 – a modest increase on the previous 12 months, driven by an increasingly active market.

Jason Aiken, chief financial officer of parent company General Dynamics, described the current market as “solid”, with North America accounting for more than half of Gulfstream’s order activity and backlog. International markets were also “showing signs of activity”, he told a 25 October third-quarter earnings call.

He says: “We are seeing decent order uptick and customer interest [from] around the globe." Asia is the leading region, accounting for a quarter of the total sales, followed by Europe, Latin America, the Middle East and Africa.

For the three months ended 30 September, Gulfstream shipped 21 large-cabin G650s, G550 and G450s and nine midsize G280s.

This compares with deliveries of 23 large-cabin and six midsize aircraft during the same period in 2016, which also included the G150. Gulfstream halted production of the 10-year-old type last year following sluggish sales.

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Gulfstream

For the first nine months of the year, the Savannah, Georgia-based manufacturer delivered 67 large-cabin and 23 midsize business jets, compared with 72 large-cabin and 21 midsize jets in the same period a year earlier.

Aiken describes Gulfstream's sales pipeline as “quite good”, and says the company is “reasonably optimistic” about the likely order intake in the fourth quarter. “I expect it to look much like the third quarter, if not somewhat better."

By year-end, Gulfstream expects to have delivered about 90 large-cabin and 30 midsize jets, against respective totals of 88 and 27 in 2016.

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Gulfstream

Aiken admits Gulfstream has benefited from serial delays to the Dassault Falcon 5X. Ongoing problems with the ultra-wide business jet’s Safran Silvercrest engines have pushed back service entry by about three years to 2020, persuading some customers to seek alternatives. “If they [Dassault] continue to have issues, we’ll continue to do our best to perform and be as competitive as we can be in this market,” he adds.

The overall performance of General Dynamics' aerospace division, which includes business aviation services provider Jet Aviation, was solid for the third quarter. Revenues for the three-month period climbed by 3.6% to just under $2 billion, while operating profit rose by 2.1% to $385 million. For the nine-month period, revenue was up by 2.6% to more than $6.1 billion and operating profit grew by 10.6% to $1.25 billion.

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