Tattle-tale, tattle-tale! If there's one thing parents hate hearing from one of their children, it's news that one of the other kids is misbehaving. It's not that we don't want to be kept in the loop, you understand. It's just that, there's only so much bad news you want to hear, y'know?
And so it is with investing. Yesterday, diversified industrial conglomerate Textron
This news would be bad enough if it were only a mea culpa on Textron's part. Problem is, bad news tends to come in waves in the business jet market. What affects Textron is almost certain to hurt earnings at Gulfstream-maker General Dynamics
The good news, to the extent that it exists, is that with any luck at all, these rivals will be hurt less by Textron's tattle than the tattler itself. While "executive" jets make up Embraer's second biggest source of revenue, for example, the company depends on them for less than 17% of its business. Similarly, Aerospace accounts for only about 16% of General D's annual sales, and it's more a hobby than a vocation at Goldman Sachs.
Meanwhile, the weakness in corporate jet sales doesn't seem to be slowing down Boeing
Moral of the story: Maybe bigger really is better -- this year at least.