Textron Inc. ( TXT Quick Quote TXT - Free Report) reported second-quarter 2021 adjusted earnings of 81 cents per share, which exceeded the Zacks Consensus Estimate of 61 cents by 32.8%. The bottom line also improved significantly from 13 cents recorded in the year-ago quarter.
Including one-time items also, the company posted GAAP earnings of 81 cents per share against loss of 40 cents incurred in the year-ago quarter.
This year-over-year improvement can be attributed to significantly higher revenues as well as segment profit generated this quarter compared to the second quarter of 2020.
Total revenues came in at $3,191 million, which beat the Zacks Consensus Estimate of $2,917 million by 9.4%. The reported figure also improved a solid 29.1% from the year-ago quarter’s $2,472 million on higher contributions from all segments, except the Finance division.
Manufacturing revenues increased 29.4% to $3,179 million. Revenues at the Finance division declined 20% to $12 million.
Segmental Performance Textron Aviation: In the quarter under review, revenues at this segment improved 55.4% to $1,161 million from $747 million in the year-ago quarter. The upside was driven by higher Citation jet volume, aftermarket volume and commercial turboprop volume.
The company delivered 44 jets, up from 23 in the year-ago quarter. It also delivered 33 commercial turboprops, up from 15 in second-quarter 2020.
The segment generated profit of $96 million in the quarter against loss of $66 million incurred in the year-ago quarter, driven by higher volume and mix, a favorable impact from performance of $34 million and favorable pricing, net of inflation.
The order backlog at the end of the quarter was $2.7 billion.
Bell: Revenues from this segment were $891 million, up 8.4% from the year-ago quarter’s $822 million, primarily due to higher commercial revenues.
The segment delivered 47 commercial helicopters in the quarter, up from 27 in last year’s quarter.
Segment profits were down 6.8% to $110 million on account of higher research and development costs, largely related to the future vertical lift programs. Bell’s order backlog at the end of the quarter was $4.8 billion, down $0.4 billion sequentially.
Textron Systems: Revenues at this segment came in at $333 million, up 2.1% year over year.
Segmental profits increased 29.7% year over year to $48 million in the second quarter.
Textron Systems’ backlog at the end of the second quarter was $2.3 billion, down $0.1 billion sequentially.
Industrial: Revenues at this segment improved 41.3% to $794 million, primarily due to higher volume and mix from Fuel Systems and Functional Components as well as Specialized Vehicles.
Segment profit was $32 million against loss of $11 million incurred in the previous-year quarter owing to higher volume and mix at each of the unit’s businesses.
Finance: Revenues at this segment decreased to $12 million from $15 million in the year-ago quarter. Profit for this segment came in at $3 million compared with $4 million in the second quarter of 2020. Financials
As of Jul 3, 2021, cash and cash equivalents totaled $1,995 million compared with $2,146 million as of Jan 2, 2021.
Cash flow from operating activities amounted to $679 million at the end of the second quarter against cash outflow of $148 million at the end of the prior-year period.
Capital expenditures were $75 million in second-quarter 2021 compared with $46 million in second-quarter 2020.
Long-term debt was $3,182 million as of Jul 3, 2021, compared with $3,198 million as of Jan 2, 2021.
Textron currently expects to generate adjusted earnings per share from continuing operations in the range of $3.00 to $3.20, indicating an increase from the prior guidance range $2.80-$3.00.
The Zacks Consensus Estimate for 2021 of $3.16 lies above the mid-point of the company’s newly guided range.
Textron currently carries a Zacks Rank #2 (Buy). You can see
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