Textron Aviation third-quarter revenue rises 14% on higher jet deliveries

Aftermarket parts and services revenue hit $652m at the end of third quarter.

Textron Aviation revenue rose 14% year-over-year to $1.7bn in the third quarter of 2026, up $201m from the same period last year as the segment delivered 51 jets in the quarter, nine more than the same quarter of 2025.

The company said the segment’s profit rose 4% to $179m with backlog at the end of the quarter at $8bn, an increase of 3% year-over-year. The company said the demand for both the jets and turboprops remained strong with the Aviation segment experiencing its highest third-quarter orders since 2023.

Breakdown showed aircraft revenue was up $152m, driven by higher Citation jet volume which was partially offset by lower volumes in the commercial turboprops.

By model, the 51 jets comprised 11 Citation Latitudes, 10 M2 Gen2s, nine CJ3+/CJ3 Gen2s, nine Longitudes, seven CJ4 Gen2s and five Ascends. Jet deliveries for the first nine months totalled 128, against 122 a year earlier.

Aftermarket parts and services revenue hit $652m at the end of third quarter, up $49m on absolute basis due to higher volume and pricing.

“In Q3, aviation sales to US customers increased 15% y-o-y to $1.2bn (71% of total) while sales to European customers rose 55% y-o-y to $178m (11%) and rest of the world -4% y-o-y to $313m (19%). Aviation aftermarket grew 10% y-o-y driven by TRU,” said Sheila Kahyaoglu, equity analyst at Jefferies in her earnings review of Textron. Atherton, in the earning call, pinned the aftermarket growth to strong fleet utilisation.

“Demand across both jets and turboprops continued to be strong with Aviation experiencing its highest Q3 orders since 2023,” said CEO Lisa Atherton on the earnings call. She further added that the company has not seen any change in customer buying behaviour despite higher interest rates or geopolitical issues.

On the results, Atherton added that the supply chain issues are limiting how quickly company can deliver aircraft. “The thing that holds us up is probably 3 or 4 key supply issues, and it’s largely engines, extrusions, spars and GPUs,” she said. Atherton said that the company has qualified a second spar supplier, which she said would start to come into play in the last quarter of 2026 with more progress expected through 2027.

When asked about the longer waits for aircraft holding back orders, Atherton said shorter lead times would help. “If they can say I can get it inside a certain time frame instead of having to put a deposit down and wait for years, I mean, certainly, I think you’re going to open up the order book even more,” she said.

On the progress of new light jets, Atherton said the three Gen3 programmes have logged more than 1,200 combined flight test hours and that the first production of CJ4 Gen3 has rolled out. “I do believe in the first half of ’27, we should start to see some of those entry into service,” she said.

Chief financial officer David Rosenberg said that the Aviation segment’s margins should improve through the fourth quarter and into the first half of next year, with the segment expected to end 2026 at the low end of its 11% to 12% full-year margin range.

“Aviation margins of 10.7% in Q3 and 10.6% YTD on manufacturing inefficiencies, cost of sales inflation of $45m and $137m, respectively, in addition to higher compensation expenses,” added Kahyaoglu.

“If we assume 25% volume incremental, productivity investments have been a ~100 bps headwind YTD, based on our implied assumption. Segment profit increased +4% on aircraft revenues +15% and aftermarket parts & services +10%.”