NetJets Cuts 90% Of Hawker Jet Orders, Hawker Backlog Plunges By 40%: Textron Is Somehow Still A Conviction Buy At Goldman
From private jet maker Hawker Beechcraft's most recent Financial Update:
[Hawker Beechcraft] announced that it has received cancellation notices from NetJets, Inc. for a significant number of aircraft previously contracted to be delivered over several years beginning in 2011. The impact of the cancellations will be to reduce the Company’s current backlog by approximately $2.6 billion. HBAC has previously disclosed that NetJets, while a considerable source of backlog, was not expected to provide the Company any substantial revenue during 2009 or 2010 and has historically not represented more than 10 percent of the Company’s annual revenue. The cancellations represent approximately 90 percent of the Company’s previously contracted backlog with NetJets. After removing the cancelled NetJets orders from backlog and considering the anticipated sales and order activity for the fourth quarter, backlog is expected to be approximately $3.5 billion at December 31, 2009. The Company continues to expect depressed demand in the near term.
We are somewhat confident this press release has made its way to Goldman Textron analyst Noah Poponak (seeing how Hawker is a Goldman portfolio company, this seems a fair assumption). Whether this results in a dodecatuple secret turbo conviction Buy for Textron remains to be seen. Last time we checked, Textron was on the Prop Trading Conviction Sell list, aka Outside Idiot Clients Conviction Buy list.