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Textron (TXT) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
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Textron Inc. (TXT - Free Report) reported third-quarter 2020 adjusted earnings of 53 cents per share, which exceeded the Zacks Consensus Estimate of 35 cents by 51.4%.
Including one-time items, the company posted GAAP earnings of 50 cents per share compared with 95 cents generated in the year-ago quarter.
This year-over-year deterioration can be attributed to COVID-19, which led the company to witness lower commercial jet and aftermarket volume.
Revenues
Total revenues came in at $2,735 million, which missed the Zacks Consensus Estimate of $2,822 million by 3.1%. The reported figure also decreased 16.1% from the year-ago quarter’s $3,259 million on lower contributions from the company’s Aviation, Textron Systems and Industrial segments.
Manufacturing revenues decreased 16.1% to $2,722 million while revenues at the Finance division declined 7.1% to $13 million.
Textron Aviation: In the quarter under review, revenues at this segment plunged 33.8% to $795 million from $1,201 million in the year-ago quarter. The decline was primarily due to lower Citation jet volume and lower commercial turboprop volume on account of COVID-19 induced demand fall. Also, lower aftermarket volume owing to reduced aircraft utilization contributed to the unit’s revenue decline.
The company delivered 25 jets, down from 45 in the year-ago quarter. It also delivered 21 commercial turboprops, down from 39 in third-quarter 2019.
The segment incurred loss of $29 million in the quarter against profit of $104 million earned in the year-ago quarter, owing to lower volume and mix. The order backlog at the end of the quarter was $1.8 billion.
Bell: Revenues from this segment were $793 million, up 1.3% from the year-ago quarter’s $783 million, primarily due to higher military volume.
The segment delivered 41 commercial helicopters in the quarter, down from 42 last year.
Segment profits were up 8.2% to $119 million on account of favorable performance. Bell’s order backlog at the end of the quarter was $5.7 billion, down $0.1 billion sequentially.
Textron Systems: Revenues at this segment came in at $302 million, down from $311 million in the year-ago period. The deterioration can be attributable to lower volume at the TRU Simulation and Training business.
Segmental profits increased 29% year over year to $40 million in the third quarter.
Textron Systems’ backlog at the end of the third quarter was $1.9 billion, flat sequentially.
Industrial: Revenues at this segment declined 12.4% to $832 million due to lower volume and mix in the Specialized Vehicles product line.
Moreover, segment profit was $58 million compared with $47 million in the previous year quarter owing to lower volume and mix.
Finance: Revenues at this segment decreased to $13 million from $14 million in the year-ago quarter.
Financials
As of Oct 3, 2020, cash and cash equivalents totaled $2,518 million compared with $1,181 million as of Jan 4, 2020.
Cash flow from operating activities amounted to $220 million at the end of the third quarter compared with $205 million at the end of the prior-year period.
Capital expenditures were $55 million in third-quarter 2020 compared with $81 million in third-quarter 2019.
Long-term debt was $3,199 million as of Oct 3, 2020, compared with $2,563 million as of Jan 4, 2020.
Lockheed Martin (LMT - Free Report) reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.
Hexcel (HXL - Free Report) reported third-quarter 2020 loss of 29 cents per share against the Zacks Consensus Estimate of earnings of 7 cents. The bottom line also declined from the prior-year quarter’s earnings per share of 90 cents.
The Boeing Company (BA - Free Report) incurred adjusted loss of $1.39 per share for third-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of $2.33.
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Textron (TXT) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
Textron Inc. (TXT - Free Report) reported third-quarter 2020 adjusted earnings of 53 cents per share, which exceeded the Zacks Consensus Estimate of 35 cents by 51.4%.
Including one-time items, the company posted GAAP earnings of 50 cents per share compared with 95 cents generated in the year-ago quarter.
This year-over-year deterioration can be attributed to COVID-19, which led the company to witness lower commercial jet and aftermarket volume.
Revenues
Total revenues came in at $2,735 million, which missed the Zacks Consensus Estimate of $2,822 million by 3.1%. The reported figure also decreased 16.1% from the year-ago quarter’s $3,259 million on lower contributions from the company’s Aviation, Textron Systems and Industrial segments.
Manufacturing revenues decreased 16.1% to $2,722 million while revenues at the Finance division declined 7.1% to $13 million.
Textron Inc. Price, Consensus and EPS Surprise
Textron Inc. price-consensus-eps-surprise-chart | Textron Inc. Quote
Segmental Performance
Textron Aviation: In the quarter under review, revenues at this segment plunged 33.8% to $795 million from $1,201 million in the year-ago quarter. The decline was primarily due to lower Citation jet volume and lower commercial turboprop volume on account of COVID-19 induced demand fall. Also, lower aftermarket volume owing to reduced aircraft utilization contributed to the unit’s revenue decline.
The company delivered 25 jets, down from 45 in the year-ago quarter. It also delivered 21 commercial turboprops, down from 39 in third-quarter 2019.
The segment incurred loss of $29 million in the quarter against profit of $104 million earned in the year-ago quarter, owing to lower volume and mix. The order backlog at the end of the quarter was $1.8 billion.
Bell: Revenues from this segment were $793 million, up 1.3% from the year-ago quarter’s $783 million, primarily due to higher military volume.
The segment delivered 41 commercial helicopters in the quarter, down from 42 last year.
Segment profits were up 8.2% to $119 million on account of favorable performance. Bell’s order backlog at the end of the quarter was $5.7 billion, down $0.1 billion sequentially.
Textron Systems: Revenues at this segment came in at $302 million, down from $311 million in the year-ago period. The deterioration can be attributable to lower volume at the TRU Simulation and Training business.
Segmental profits increased 29% year over year to $40 million in the third quarter.
Textron Systems’ backlog at the end of the third quarter was $1.9 billion, flat sequentially.
Industrial: Revenues at this segment declined 12.4% to $832 million due to lower volume and mix in the Specialized Vehicles product line.
Moreover, segment profit was $58 million compared with $47 million in the previous year quarter owing to lower volume and mix.
Finance: Revenues at this segment decreased to $13 million from $14 million in the year-ago quarter.
Financials
As of Oct 3, 2020, cash and cash equivalents totaled $2,518 million compared with $1,181 million as of Jan 4, 2020.
Cash flow from operating activities amounted to $220 million at the end of the third quarter compared with $205 million at the end of the prior-year period.
Capital expenditures were $55 million in third-quarter 2020 compared with $81 million in third-quarter 2019.
Long-term debt was $3,199 million as of Oct 3, 2020, compared with $2,563 million as of Jan 4, 2020.
Zacks Rank
Textron currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Lockheed Martin (LMT - Free Report) reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.
Hexcel (HXL - Free Report) reported third-quarter 2020 loss of 29 cents per share against the Zacks Consensus Estimate of earnings of 7 cents. The bottom line also declined from the prior-year quarter’s earnings per share of 90 cents.
The Boeing Company (BA - Free Report) incurred adjusted loss of $1.39 per share for third-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of $2.33.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>