Textron Wins Defense Contract

Textron Inc. (TXT - Analyst Report) announced that its unit AAI Test & Training received three separate contract modifications from the U.S. Air Force for production of the Joint Service Electronic Combat Systems Tester (“JSECST”). As per the contracts, the Textron unit will produce 32 JSECST systems valued at $11.5 million.

The JSECST system enables Defense personnel to swiftly and precisely test electronic warfare and avionics systems for mission readiness. The 32 new JSECST will be delivered to the U.S. Air Force and Navy and also to allied nations via foreign military sales. Since 2003, the unit at Textron delivered as many as 403 JSECST systems to its worldwide customers.

AAI Test & Training continues to receive defense contracts. Recently, it received a $9.7 million contract to deliver an electronic warfare (“EW”) radio frequency simulator for the U.S. Air Force's EW Avionics Integration Support Facility (EWAISF).

This stimulator will help the Air Force to test critical components, subsystems and systems for compatibility and performance, and evaluate hardware and software interactions in both EW systems and integrated suites.

AAI Test & Training is a part of the company's Textron Systems operating segment. The segment’ first-quarter 2011 performance failed to measure up with the year-ago level. The decrease in the top line resulted from lower armored security vehicle aftermarket services revenue. Quarterly backlog at the end of the reported quarter was $1.6 billion, at par with fiscal 2010 end.

The first quarter 2011 earnings per share of the company were 10 cents, reversing the year-ago net loss of 1 cent per share, but 7 cents lower than the Zacks Consensus Estimate.

Textron presently expects 2011 earnings per share in the range of $1.00 to $1.15 taking into consideration top-line growth at its manufacturing segments. The Zacks Consensus Estimate for 2011 earnings per share is currently at $1.12.

Textron shares retain a Zacks #3 Rank (short-term Hold rating). We presently have a long-term Neutral rating on the stock. The company competes with General Electric Co. (GE - Analyst Report) and United Technologies Corp. (UTX - Analyst Report).

Based in Providence, Rhode Island, Textron Inc. is a global multi-industry company that manufactures aircraft, automotive engine components and industrial tools.

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