Cessna Aircraft’s backlog continued to slide in the third quarter but a jump in Citation deliveries helped drive a $64 million increase in profit, Cessna parent Textron says.

The increase in profitability continued a turnaround for the Wichita manufacturer, which had recorded a $38 million first quarter loss that helped lead to the departure of Cessna chief Jack Pelton.

Textron Chairman and CEO Scott Donnelly had called the first quarter performance “disappointing” and declared, “We can do better in terms of driving productivity,” particularly with CJ4 production costs. But in releasing earnings results today, he praised operational improvements at Cessna. Noting that Pelton successor Scott Ernest (who was a colleague of Donnelly’s at GE) has been on board for about five months, Donnelly says, “I think he and the Cessna team have established a good cadence to drive both operational and sales execution.”

Revenues at Cessna increased $236 million in the third quarter to $771 million, in part to a leap in deliveries from 26 Citations in the third quarter of 2010 to 47 in the most recent quarter.

Segment results improved from a $31 million loss in third quarter to 2010 to a $33 million profit in the most recent quarter.

In addition to stronger volumes, Cessna’s Donnelly credits a mix of deliveries of its light to mid-size aircraft. Also, he says, “We’re continuing to see better execution, better performance, particularly in the cost activities around the CJ4.”

Backlog, however, continued to fall, down $359 million from the end of the second quarter to $2.2 billion. Cessna continued to take cancellations, and gross orders did not match deliveries, Donnelly says.

But he says he was pleased with continued success in selling aircraft despite the uncertain economic environment. “With the orders we recorded in the quarter, which is typically a slower order period, along with current customer activity, we remain on track to achieve our target of a slight increase in deliveries this year, barring no major economic disruptions,” he says, adding the company believes Cessna will have “pretty strong deliveries” in the fourth quarter.

The recent introductions of the M2 and Latitude business jets generated strong reviews and some orders, Donnelly says, but, “We’re not back in the world where people lined up to place orders for aircraft that are two, three, four years away. It’s still going to be a spot market for a while.”

Photo credit: Mike Vines