Commercial pressures cause Bell Helicopter profits to drop

Bell has now received 80 letters of intent for the 525 Relentless, with first delivery of the super medium aircraft targeted in 2017. Bell Helicopter Photo

Profits fell at Bell Helicopter last year due to lower commercial aftermarket volume and a change in the mix of commercial aircraft deliveries, parent company Textron Aviation reported on Jan. 27.

In the fourth quarter of 2015, revenues at Bell decreased by US$36 million and profit decreased by $22 million compared to the same quarter in 2014. For the full year, revenues fell to $3.45 billion—from $4.25 billion in 2014—and profits to $400 million, down from $529 million the year before.

Bell delivered eight V-22s and nine H-1 helicopters in the fourth quarter of 2015, compared to seven V-22s and seven H-1s in the previous year’s fourth quarter. But while it saw nearly the same number of commercial helicopter deliveries between quarters—56 compared to 57—fewer of the 2015 deliveries were larger models such as the Bell 412.

“[The Bell 412] is typically a very international product, and as you can imagine now between the pressure around oil and other commodities just in general the international marketplace has been pretty soft,” Textron CEO Scott Donnelly told investors in his fourth-quarter earnings call.

Bell delivered nine H-1 helicopters in the fourth quarter of 2015, and Textron predicts that higher H-1 deliveries in 2016 will help offset lower V-22 revenues. Bell Helicopter Photo

Because of soft demand for the 412, Donnelly projected “essentially flat revenues” in Bell’s commercial business in 2016. Military revenues are also expected to be flat, with lower V-22 revenues offset by higher H-1 deliveries. Donnelly forecasted 2016 revenues for Bell of around $3.4 billion, with margins in the range of 10 to 11 percent.

“As we go into Heli-Expo . . . it is going to be an interesting show to try to understand where customers are, what their expectations are going forward,” he said.

Donnelly noted that Bell plans to fly a prototype of the Bell 525 Relentless to Helicopter Association International’s Heli-Expo, March 1-3 in Louisville, Ky., “so that our customers can see the actual aircraft for the first time.”

He said the 525 program is making “good progress,” with two aircraft now in flight testing and a third scheduled to join the flight test campaign this spring. Bell currently has around 80 letters of intent for the 525, and is targeting first delivery in 2017.