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Textron (TXT) Misses on Q3 Earnings & Revenues, Ups View
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Diversified U.S. conglomerate Textron Inc. (TXT - Free Report) reported third-quarter 2016 earnings from continuing operations of 61 cents per share, missing the Zacks Consensus Estimate of 66 cents by 7.6%. Earnings were also down 3.2% from 63 cents per share reported in the year-ago quarter.
Revenues
Total revenue in the quarter was $3,251 million, missing the Zacks Consensus Estimate of $3,407 million by 4.6%. Reported revenues, however, increased 2.2% from the year-ago figure of $3,180 million primarily on account of higher contribution from Textron Aviation and Industrial.
Manufacturing revenues were up 2.1% to $3,231 million, while revenues at the Finance division increased 17.6% to $20 million during the quarter.
Textron Aviation: Revenues during the third quarter improved 3.4% to $1,198 million from $1,159 million in the year-ago quarter owing to volume and mix.
The company delivered 41 new Citation jets and 29 King Air turboprops, compared with 37 jets and 29 King Airs in the prior-year quarter.
The segment registered profit of $100 million, compared with $107 million in the year-ago quarter. Order backlog at the end of the third quarter was $1.1 billion, almost flat sequentially.
Bell: Segment revenues were $734 million, down from the year-ago level of $756 million.
The segment delivered 25 commercial helicopters, compared with 45 units in the prior-year period. Bell also delivered 6 V-22s (from 4 in third-quarter 2015) and 8 H-1s (from 5 in third-quarter 2015).
Segment profit slipped 2% to $97 million. Bell’s order backlog at the end of the quarter was $4.9 billion, almost flat with the prior quarter.
Textron Systems: Revenues during the reported quarter came in at $413 million, down 1.7% year over year. The decline was mainly due to lower volumes of Weapons and Sensors.
Segment profit increased from $39 million to $44 million.
Textron Systems’ backlog at the end of the second quarter was $2.2 billion, down by $74 million from the end of the second quarter.
Industrial: Segment revenues grew 7% to $886 million driven by higher volumes and acquisitions. Segment profit improved 8.2% to $66 million.
Financials
As of Oct 1, 2016, cash and cash equivalents were $589 million, compared with $946 million as of Jan 2, 2016.
Capital expenditure during the quarter was $99 million, compared with $113 million in the year-ago quarter. Long-term debt was $2,777 million, as of Oct 1, 2016, up from $2,435 million as of Jan 2, 2016.
Guidance
Textron raised its 2016 earnings per share guidance to the range of $2.65 to $2.85 from the prior projection of $2.60–$2.80.
The company continues to expect cash flow from continuing operations (of the manufacturing group) before pension contributions in the $500–$600 million band, down from previous range of $600–$700 million.
The Boeing Company (BA - Free Report) , Northrop Grumman Corp. (NOC - Free Report) and General Dynamics Corporation (GD - Free Report) are all scheduled to release third-quarter 2016 results on Oct 26.
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Textron (TXT) Misses on Q3 Earnings & Revenues, Ups View
Diversified U.S. conglomerate Textron Inc. (TXT - Free Report) reported third-quarter 2016 earnings from continuing operations of 61 cents per share, missing the Zacks Consensus Estimate of 66 cents by 7.6%. Earnings were also down 3.2% from 63 cents per share reported in the year-ago quarter.
Revenues
Total revenue in the quarter was $3,251 million, missing the Zacks Consensus Estimate of $3,407 million by 4.6%. Reported revenues, however, increased 2.2% from the year-ago figure of $3,180 million primarily on account of higher contribution from Textron Aviation and Industrial.
Manufacturing revenues were up 2.1% to $3,231 million, while revenues at the Finance division increased 17.6% to $20 million during the quarter.
TEXTRON INC Price, Consensus and EPS Surprise
TEXTRON INC Price, Consensus and EPS Surprise | TEXTRON INC Quote
Segment Performance
Textron Aviation: Revenues during the third quarter improved 3.4% to $1,198 million from $1,159 million in the year-ago quarter owing to volume and mix.
The company delivered 41 new Citation jets and 29 King Air turboprops, compared with 37 jets and 29 King Airs in the prior-year quarter.
The segment registered profit of $100 million, compared with $107 million in the year-ago quarter. Order backlog at the end of the third quarter was $1.1 billion, almost flat sequentially.
Bell: Segment revenues were $734 million, down from the year-ago level of $756 million.
The segment delivered 25 commercial helicopters, compared with 45 units in the prior-year period. Bell also delivered 6 V-22s (from 4 in third-quarter 2015) and 8 H-1s (from 5 in third-quarter 2015).
Segment profit slipped 2% to $97 million. Bell’s order backlog at the end of the quarter was $4.9 billion, almost flat with the prior quarter.
Textron Systems: Revenues during the reported quarter came in at $413 million, down 1.7% year over year. The decline was mainly due to lower volumes of Weapons and Sensors.
Segment profit increased from $39 million to $44 million.
Textron Systems’ backlog at the end of the second quarter was $2.2 billion, down by $74 million from the end of the second quarter.
Industrial: Segment revenues grew 7% to $886 million driven by higher volumes and acquisitions. Segment profit improved 8.2% to $66 million.
Financials
As of Oct 1, 2016, cash and cash equivalents were $589 million, compared with $946 million as of Jan 2, 2016.
Capital expenditure during the quarter was $99 million, compared with $113 million in the year-ago quarter. Long-term debt was $2,777 million, as of Oct 1, 2016, up from $2,435 million as of Jan 2, 2016.
Guidance
Textron raised its 2016 earnings per share guidance to the range of $2.65 to $2.85 from the prior projection of $2.60–$2.80.
The company continues to expect cash flow from continuing operations (of the manufacturing group) before pension contributions in the $500–$600 million band, down from previous range of $600–$700 million.
Textron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
The Boeing Company (BA - Free Report) , Northrop Grumman Corp. (NOC - Free Report) and General Dynamics Corporation (GD - Free Report) are all scheduled to release third-quarter 2016 results on Oct 26.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>