ALBANY, N.Y. (AP) -- Textile and composite maker Albany International Corp. warned on Tuesday that its customer Eclipse Aviation plans to cut production of the Eclipse 500 jet airplane, hurting sales and profits in its Albany Engineered Composites segment.
Albany shares dropped $4.38, or 13 percent, to $29.15 in afternoon trading.
Albany said Eclipse "has indicated that it was substantially reducing production of the Eclipse 500 jet" and related components from AEC.
Albany said sales to Eclipse accounted for a "significant portion" of AEC's 2008 revenue and a significant portion of production at its facility in Boerne, Texas.
Eclipse spokeswoman Alana McCarraher said no decision had been made on whether to cut production of the Eclipse 500. "We're still examining our entire production process," she said. She said Eclipse still has 2,300 orders for the Eclipse 500; it has delivered 245.
Albuquerque-based Eclipse has had financial problems and it has been struggling to ramp up production of its six-seat, twin-engine Eclipse 500. It got a $100 million investment in January from European Technology and Investment Research Center Aviation. Last month ETIRC Chairman Roel Piper took over Eclipse as chief executive officer, and the company got a new cash infusion from ETIRC.
Albany said lower sales to Eclipse would cause AEC to lose money until the first or second quarter of 2009. It said Eclipse has told it to expect purchases of AEC components to exceed previous levels after the second half of 2009.
Albany said it still expects its total revenue for 2008 to be at least 35 percent higher than the $1.09 billion in revenue booked in 2007, but anticipates the reduced sales to Eclipse will cut its third- and fourth-quarter sales growth significantly. Its 2009 sales growth might also be hurt, the company said.