Cessna Aircraft Company, a Textron Inc. (TXT - Free Report) company, announced that it signed a purchase agreement with NetJets Inc. for delivery of up to 150 Citation Latitude business jets, with initial deliveries beginning in 2016. NetJets is a Berkshire Hathaway Inc. (BRK.B - Free Report) , company. Currently, NetJets owns and operates more than 250 Citation jets including the Citation Encore, Citation XLS+, Citation Sovereign, and Citation X.
Citation Latitude business jet has been designed with space for a crew of two plus up to eight passengers; features Garmin Ltd.’s (GRMN - Free Report) G5000 series avionics; an 84-inch (2.13-meter) fuselage; a 6-foot (1.83-meter) high passenger cabin with a flat floor; and Cessna's Clairity cabin technology solution.
Citation Latitude business jet’s current retail price is $14.9 million. The jet offers a full fuel payload of 1,000 pounds (454 kilograms), a maximum cruise speed of 440 knots true airspeed (815 kilometers per hour) and a range of 2,300 nautical miles (4,259.6 kilometers). Preliminary specifications project that the aircraft will operate at airports with runways as short as 3,900 feet (1,189 meters), will have a maximum altitude of 45,000 feet (13,716 meters) and will climb direct to 43,000 feet (13,106 meters) in 26 minutes.
First flight of the Citation Latitude prototype is scheduled for mid-year 2014 and entry into service expected in 2015.
Textron Inc. is a global multi-industry company that manufactures aircraft, automotive engine components and industrial tools. It is also a provider of solutions and services for aircraft, fastening systems and industrial products and components.
Going forward, the company’s diversified presence across commercial, manufacturing and industrial products, as well as financing operations, insulates it from specific business risk. It is also increasingly focused on its core manufacturing business and is gradually exiting from its commercial finance business.
However, we are concerned about the rate of new order booking at Cessna, the rate of recovery of the business jet market, and defense spending cutbacks. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock. Some of its main competitors are General Electric Company (GE - Free Report) and United Technologies Corporation (UTX - Free Report) .