Boston, MA 10/21/2013 (wallstreetpr) – World’s largest manufacturer of light business aircrafts has declared a poor set of numbers. And surprisingly, markets have decided to ignore the bad news and stock rallied almost 7% from its day’s lows.
On the revenues front, company clocked a quarterly figure of $2.9 billion. This is lower than what it had achieved in third quarter last year, but was in line with market expectations. The major negative surprise came on the net income front. Company reported a net income of 99 million dollars, which translates into earnings of 35 cents per share. Markets were expecting it to be lower than last year’s 51 cents per share, but not below 47 cents. But company declared that EPS was down almost 34% from last year’s figures.
Company management has said that sales of its aircrafts have been lower as small business owners, which are company’s main business customers are avoiding making big purchases due to fiscal cliff related issues. It is this postponement of luxury spending that has dented company’s numbers. Though analysts believe that economic environment would improve at end of this financial year, company has gone ahead and lowered full year EPS guidance from $1.90-$2.10 to a much lower $1.75-$1.85 per share.
But the surprising part of the story was market’s reaction to company’s number. It is being speculated in market that there is big money sitting on the fence. This money is waiting to get more clarity on fiscal front before it would be routed toward luxury transportation spending. It is also being said that Textron Inc. (NYSE:TXT) is likely to go ahead with its bid for Beechcraft. But it is also possible that other non-aviation players looking to diversify in airline industry might also join the race for Beechcraft. But as of now, this news about Textron and Beechcraft in itself seems to be a trigger for Textron’s stocks strange behavior.
