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Textron (TXT) to Report Q4 Earnings: What's in the Cards?

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Textron Inc. (TXT - Free Report) is scheduled to report fourth quarter and 2019 results on Jan 29, before market open.

In the last reported quarter, the company delivered a positive earnings surprise of 11.76%. Moreover, Textron surpassed the Zacks Consensus Estimate in three of the trailing four quarters by 11.77%, on average.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

In December 2019, Textron’s Bell segment delivered 12 Bell 505 helicopters to Horizon International Flight Academy. Hence, higher commercial volumes are expected to have boosted the company’s top line in the soon-to-be-reported quarter.

In line with this, the Zacks Consensus Estimate for the company’s fourth-quarter sales stands at $3.86 billion, suggesting an increase of 2.8% from the figure reported in the prior-year quarter.

During the fourth quarter, Textron Aviation made significant investments in expanding global part distribution capabilities across warehouses at three facility locations in the United States, a combined footprint of more than 8,000 square feet. This highlighted the company’s continued investments in aftermarket and MRO support for its Beechcraft, Cessna and Hawker products.

The expansion, which might boost the company’s revenues over the long run, is likely to have shot up expenses during the quarter under review. This, in turn, is likely to have kept Textron’s bottom line under pressure. In
line with this, the Zacks Consensus Estimate for fourth-quarter earnings, pegged at $1.08 per share, suggest a 6.1% decline from the year-ago quarter’s reported figure.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Textron in the fourth quarter. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Textron has an Earnings ESP of +1.85% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Textron Inc. Price and EPS Surprise

Other Stocks to Consider

Here are some defense companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

General Dynamics Corporation (GD - Free Report) is scheduled to report fourth-quarter 2019 results on Jan 29. The company has an Earnings ESP of +1.49% and a Zacks Rank #3.

Heico Corporation (HEI - Free Report) is expected to release fourth-quarter 2019 results soon. The company has an Earnings ESP of +8.94% and a Zacks Rank #1.

Aerojet Rocketdyne Holdings is expected to release fourth-quarter 2019 results soon. The company has an Earnings ESP of +2.17% and a Zacks Rank #3.

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