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Will Aviation Recovery Aid Textron's (TXT) Q1 Earnings?
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Textron Inc. (TXT - Free Report) is scheduled to report first-quarter 2022 results on Apr 28, before market open.
Textron has a four-quarter earnings surprise of 22.75%, on average. The recovery in the aviation market is expected to have contributed to Textron’s revenues. However, lower volumes from Bell and Textron Systems might have hurt overall performance.
Textron Aviation Remains a Key Catalyst
With the commercial aviation market showing solid signs of recovery in recent times, TXT’s aviation segment’s performance is ramping up, driven by strong demand. Thus, one may expect the company to have witnessed strong deliveries for Citation jets and commercial turboprops in the first quarter. This, in turn, must have boosted the segment’s revenues in the soon-to-be-reported quarter. Also, higher aftermarket volume is expected to have added impetus to this segment’s performance in the first quarter.
The Zacks Consensus Estimate for Textron Aviation segment’s revenues in the first quarter is pegged at $1,042 million, indicating an improvement of 20.5% from revenues reported in the year-ago quarter.
The Bell segment is likely to have been negatively impacted by lower revenues from the military business, primarily related to lower H-1 production. However, the commercial side of the segment is expected to reflect strong demand trends.
The Zacks Consensus Estimate for the Bell segment’s revenues in the first quarter is pegged at $762 million, indicating a decline of 9.9% from revenues reported in the year-ago quarter.
Lower Volumes From Textron Systems
Increased demand for tactical air programs is expected to have contributed favorably to Textron Systems’ results in the first quarter. However, the U.S. Army's withdrawal from Afghanistan on its fee-for-service contracts for Textron’s Air Systems might have resulted in lower volumes for the first quarter. This is expected to have negatively impacted its segment’s performance in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for Textron System’s revenues in the first quarter is pegged at $312 million, indicating a decline of 4.9% from revenues reported in the year-ago quarter.
Solid Expectations for the Industrial Unit
Within the Kautex unit of the Industrial segment, increasing volumes from improving OEM auto production are expected to have contributed to the segment’s performance. As far as specialized vehicles are concerned, improving supply chain conditions and increasing volumes across its products are likely to have boosted growth. So, we remain optimistic about this segment’s performance in the soon-to-be-reported quarter.
Q1 Estimates
The Zacks Consensus Estimate for first-quarter revenues is pegged at $2.97 billion, suggesting a rise of 3.3% from the figure reported in the year-ago quarter.
Higher products volume, favorable pricing and increased operating leverage must have bolstered its bottom line in the soon-to-be-reported quarter. Also, favorable revenues must have boosted its year-over-year earnings performance.
The Zacks Consensus Estimate for first-quarter earnings is pegged at 74 cents per share, indicating an improvement of 5.7% from the prior-year reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for TXT this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here.
Textron has an Earnings ESP of -2.97% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Stocks to Consider
Here are a few defense companies that you may want to consider as these have the right combination of elements to post an earnings beat this season:
Northrop Grumman has a four-quarter average earnings surprise of 11.05%. The long-term earnings growth rate of NOC stands at 6.2%. The Zacks Consensus Estimate for Northrop’s first-quarter sales and earnings is pegged at $8.86 billion and $5.95 per share, respectively.
Spirit Aerosystems (SPR - Free Report) has an Earnings ESP of +9.34% and a Zacks Rank #3. It has a four-quarter average negative earnings surprise of 14.56%.
The long-term earnings growth rate of SPR stands at 8.5%. The Zacks Consensus Estimate for Spirit Aerosystems’ first-quarter sales and earnings is pegged at $1.09 billion and 61 cents per share, respectively.
CAE (CAE - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #3. CAE delivered a four-quarter average earnings surprise of 0.72%.
The long-term earnings growth rate of CAE is pegged at 8%. The Zacks Consensus Estimate for CAE’s first-quarter sales and earnings is pegged at $744.5 million and 18 cents per share, respectively.
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Will Aviation Recovery Aid Textron's (TXT) Q1 Earnings?
Textron Inc. (TXT - Free Report) is scheduled to report first-quarter 2022 results on Apr 28, before market open.
Textron has a four-quarter earnings surprise of 22.75%, on average. The recovery in the aviation market is expected to have contributed to Textron’s revenues. However, lower volumes from Bell and Textron Systems might have hurt overall performance.
Textron Aviation Remains a Key Catalyst
With the commercial aviation market showing solid signs of recovery in recent times, TXT’s aviation segment’s performance is ramping up, driven by strong demand. Thus, one may expect the company to have witnessed strong deliveries for Citation jets and commercial turboprops in the first quarter. This, in turn, must have boosted the segment’s revenues in the soon-to-be-reported quarter. Also, higher aftermarket volume is expected to have added impetus to this segment’s performance in the first quarter.
The Zacks Consensus Estimate for Textron Aviation segment’s revenues in the first quarter is pegged at $1,042 million, indicating an improvement of 20.5% from revenues reported in the year-ago quarter.
Textron Inc. Price and EPS Surprise
Textron Inc. price-eps-surprise | Textron Inc. Quote
Bell’s Lower Military Revenues May Be a Drag
The Bell segment is likely to have been negatively impacted by lower revenues from the military business, primarily related to lower H-1 production. However, the commercial side of the segment is expected to reflect strong demand trends.
The Zacks Consensus Estimate for the Bell segment’s revenues in the first quarter is pegged at $762 million, indicating a decline of 9.9% from revenues reported in the year-ago quarter.
Lower Volumes From Textron Systems
Increased demand for tactical air programs is expected to have contributed favorably to Textron Systems’ results in the first quarter. However, the U.S. Army's withdrawal from Afghanistan on its fee-for-service contracts for Textron’s Air Systems might have resulted in lower volumes for the first quarter. This is expected to have negatively impacted its segment’s performance in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for Textron System’s revenues in the first quarter is pegged at $312 million, indicating a decline of 4.9% from revenues reported in the year-ago quarter.
Solid Expectations for the Industrial Unit
Within the Kautex unit of the Industrial segment, increasing volumes from improving OEM auto production are expected to have contributed to the segment’s performance. As far as specialized vehicles are concerned, improving supply chain conditions and increasing volumes across its products are likely to have boosted growth. So, we remain optimistic about this segment’s performance in the soon-to-be-reported quarter.
Q1 Estimates
The Zacks Consensus Estimate for first-quarter revenues is pegged at $2.97 billion, suggesting a rise of 3.3% from the figure reported in the year-ago quarter.
Higher products volume, favorable pricing and increased operating leverage must have bolstered its bottom line in the soon-to-be-reported quarter. Also, favorable revenues must have boosted its year-over-year earnings performance.
The Zacks Consensus Estimate for first-quarter earnings is pegged at 74 cents per share, indicating an improvement of 5.7% from the prior-year reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for TXT this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here.
Textron has an Earnings ESP of -2.97% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Stocks to Consider
Here are a few defense companies that you may want to consider as these have the right combination of elements to post an earnings beat this season:
Northrop Grumman (NOC - Free Report) has an Earnings ESP of +1.32% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northrop Grumman has a four-quarter average earnings surprise of 11.05%. The long-term earnings growth rate of NOC stands at 6.2%. The Zacks Consensus Estimate for Northrop’s first-quarter sales and earnings is pegged at $8.86 billion and $5.95 per share, respectively.
Spirit Aerosystems (SPR - Free Report) has an Earnings ESP of +9.34% and a Zacks Rank #3. It has a four-quarter average negative earnings surprise of 14.56%.
The long-term earnings growth rate of SPR stands at 8.5%. The Zacks Consensus Estimate for Spirit Aerosystems’ first-quarter sales and earnings is pegged at $1.09 billion and 61 cents per share, respectively.
CAE (CAE - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #3. CAE delivered a four-quarter average earnings surprise of 0.72%.
The long-term earnings growth rate of CAE is pegged at 8%. The Zacks Consensus Estimate for CAE’s first-quarter sales and earnings is pegged at $744.5 million and 18 cents per share, respectively.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.