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Textron Inc. (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased 52.6% from 57 cents in the year-ago quarter. The year-over-year improvement was primarily driven by a solid top-line growth in the reported quarter.
Revenues
Total revenues in the quarter totaled $3,726 million, which outpaced the Zacks Consensus Estimate of $3,585 million by 3.9%. The reported figure also improved 3.4% from the year-ago figure of $3,586 million, courtesy of higher contribution from the Bell, Textron Aviation and Industrial segments.
Manufacturing revenues were up 3.4% to $3,709 million, while revenues at the Finance division declined 5.5% to $17 million.
Textron Aviation: In the quarter under review, revenues at this segment increased 9% to $1,276 million from $1,171 million in the year-ago quarter. This improvement can be attributed to higher price and volume.
The company delivered 48 jets, up from 46 last year, and 47 commercial turboprops, up from 33 the previous year.
The segment registered profits of $104 million in the second quarter, up from $54 million in the year-ago quarter owing to favorable volume, mix, and price. Order backlog at the end of the quarter was $1.6 billion, which came in line sequentially.
Bell: Revenues from this segment totaled $831 million, up 0.7% from the year-ago level of $825 million. The uptick was owing to higher commercial volumes, partially offset by lower military revenues.
Segment profits were up by 4.5% to $117 million. Bell’s order backlog at the end of the quarter was $5.5 billion, up $1.9 billion from the preceding quarter.
Textron Systems: Revenues at this segment came in at $380 million, down from $477 million a year ago mainly due to lower volume at Weapons & Sensors related to the discontinuance of SFW production in 2017. Also, lower TAPV deliveries at Textron Marine & Land Systems weighed on this segment’s top-line performance.
Additionally, segmental profits decreased to $40 million from $42 million on lower net volume.
Textron Systems’ backlog at the end of the second quarter was $1.2 billion, slightly lower than $1.4 billion in the first quarter of 2018.
Industrial: Segmental revenues grew 9.8% to $1,222 million primarily driven by higher volumes across all of this unit’s product lines and a favorable impact of foreign exchange.
However, segmental profits were down by $2 million due to the mix of products sold.
Finance: Revenues at this segment slipped to $17 million, while profits remained flat at $5 million.
Financials
As of Jun 30, 2018, cash and cash equivalents were $554 million compared with $1,079 million as of Dec 31, 2017.
Cash flow from operating activities totaled $415 million at the end of the second quarter, compared with $248 million at the end of second-quarter 2017.
Capital expenditures amounted to $82 million compared with $85 million in the prior-year quarter.
Long-term debt was $3,070 million as of Jun 30, 2018, compared with $3,074 million as of Dec 31, 2017.
Guidance
Textron has raised its guidance for 2018. The company currently expects full-year earnings per share from continuing operations in the range of $3.15–$3.35 per share compared with $2.95- $3.15 projected earlier.
General Dynamics (GD - Free Report) is expected to report second-quarter 2018 results on Jul 25.
Boeing (BA - Free Report) is also slated to report second-quarter results on Jul 25.
Huntington Ingalls (HII - Free Report) is expected to report second-quarter results on Aug 2.
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Textron (TXT) Tops Q2 Earnings Estimates, Lifts '18 EPS View
Textron Inc. (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased 52.6% from 57 cents in the year-ago quarter. The year-over-year improvement was primarily driven by a solid top-line growth in the reported quarter.
Revenues
Total revenues in the quarter totaled $3,726 million, which outpaced the Zacks Consensus Estimate of $3,585 million by 3.9%. The reported figure also improved 3.4% from the year-ago figure of $3,586 million, courtesy of higher contribution from the Bell, Textron Aviation and Industrial segments.
Manufacturing revenues were up 3.4% to $3,709 million, while revenues at the Finance division declined 5.5% to $17 million.
Textron Inc. Price, Consensus and EPS Surprise
Textron Inc. Price, Consensus and EPS Surprise | Textron Inc. Quote
Segmental Performance
Textron Aviation: In the quarter under review, revenues at this segment increased 9% to $1,276 million from $1,171 million in the year-ago quarter. This improvement can be attributed to higher price and volume.
The company delivered 48 jets, up from 46 last year, and 47 commercial turboprops, up from 33 the previous year.
The segment registered profits of $104 million in the second quarter, up from $54 million in the year-ago quarter owing to favorable volume, mix, and price. Order backlog at the end of the quarter was $1.6 billion, which came in line sequentially.
Bell: Revenues from this segment totaled $831 million, up 0.7% from the year-ago level of $825 million. The uptick was owing to higher commercial volumes, partially offset by lower military revenues.
Segment profits were up by 4.5% to $117 million. Bell’s order backlog at the end of the quarter was $5.5 billion, up $1.9 billion from the preceding quarter.
Textron Systems: Revenues at this segment came in at $380 million, down from $477 million a year ago mainly due to lower volume at Weapons & Sensors related to the discontinuance of SFW production in 2017. Also, lower TAPV deliveries at Textron Marine & Land Systems weighed on this segment’s top-line performance.
Additionally, segmental profits decreased to $40 million from $42 million on lower net volume.
Textron Systems’ backlog at the end of the second quarter was $1.2 billion, slightly lower than $1.4 billion in the first quarter of 2018.
Industrial: Segmental revenues grew 9.8% to $1,222 million primarily driven by higher volumes across all of this unit’s product lines and a favorable impact of foreign exchange.
However, segmental profits were down by $2 million due to the mix of products sold.
Finance: Revenues at this segment slipped to $17 million, while profits remained flat at $5 million.
Financials
As of Jun 30, 2018, cash and cash equivalents were $554 million compared with $1,079 million as of Dec 31, 2017.
Cash flow from operating activities totaled $415 million at the end of the second quarter, compared with $248 million at the end of second-quarter 2017.
Capital expenditures amounted to $82 million compared with $85 million in the prior-year quarter.
Long-term debt was $3,070 million as of Jun 30, 2018, compared with $3,074 million as of Dec 31, 2017.
Guidance
Textron has raised its guidance for 2018. The company currently expects full-year earnings per share from continuing operations in the range of $3.15–$3.35 per share compared with $2.95- $3.15 projected earlier.
Zacks Rank
Textron currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Defense Releases
General Dynamics (GD - Free Report) is expected to report second-quarter 2018 results on Jul 25.
Boeing (BA - Free Report) is also slated to report second-quarter results on Jul 25.
Huntington Ingalls (HII - Free Report) is expected to report second-quarter results on Aug 2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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