(Reuters) -Textron Inc expects to continue ramping up business jet production in 2022 on demand from wealthy travelers, but broader industry supply-chain hiccups, labor shortages and recent surges in COVID-19 cases remain challenges.
Textron (NYSE:TXT) shares slipped 6% in afternoon trading, after the U.S. maker of Cessna business jets disappointed investors with some of its 2022 guidance.
Cautious passengers avoiding commercial flights during the pandemic have helped drive U.S. private air traffic above 2019 levels.
Business jet makers, eager to capitalize on that demand, are working with suppliers to mitigate the impact of global shipping and supply chain disruptions, along with the spread of the highly contagious Omicron variant.
"We have been ramping up the production rate. We continue to do that and expect to continue to do that throughout the course of 2022,” Textron Chief Executive Scott Donnelly told analysts on Thursday.
But Donnelly said Textron would be cautious with any increases and not “want to do something stupid and try to go radically accelerate production rates and then burn down backlog.“
Textron's Donnelly said supplier issues have not slowed production rates or 2022 deliveries. A temporary spike in Omicron cases at the turn of the year, however, had some impact on operations.
Textron, which also produces helicopters, reported a fourth-quarter revenue miss, with its aviation division delivering 46 jets in the quarter, down from 61 a year earlier.
It delivered 167 jets in 2021, up from 132 in 2020, and reported an aviation backlog of $4.1 billion at year end.
The company expects revenue of about $13.3 billion for 2022, compared to analysts' estimates of $13.56 billion, according to Refinitiv IBES data.
Textron expects 2022 earnings per share between $3.80 and $4.00. The company reported revenue of $3.32 billion in the three months ended Dec. 31, below analysts' estimate of $3.44 billion.