Textron Reports First Quarter 2019 Results

  • EPS of $0.76, up 5.6% year over year
  • Segment profit of $294 million, up 5.4% from prior year
  • Operating margin of 9.5%, up from 8.5% a year ago
  • $202 million returned to shareholders through share repurchases

PROVIDENCE, R.I. — (BUSINESS WIRE) — April 17, 2019 — Textron Inc. (NYSE: TXT) today reported first quarter 2019 net income of $0.76 per share, compared to $0.72 per share in the first quarter of 2018.

“Our results in the quarter were driven by growth and performance at Aviation and continued strong execution at Bell, which resulted in significant margin improvements at those segments,” said Textron Chairman and CEO Scott C. Donnelly.

Cash Flow

Net cash used by operating activities of the manufacturing group for the first quarter totaled $196 million, compared to $53 million of net cash used last year. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, reflected a use of cash of $291 million compared to a use of cash of $158 million last year.

In the quarter, Textron returned $202 million to shareholders through share repurchases.

Outlook

Textron confirmed its 2019 earnings per share from continuing operations guidance of $3.55 to $3.75 and its expectation for cash flow from continuing operations of the manufacturing group before pension contributions of $700 to $800 million with planned pension contributions of about $50 million.

Donnelly continued, “The company remains on track for a strong 2019 as we continue our focus on operational improvement and earnings growth.”

First Quarter Segment Results

Textron Aviation

Revenues at Textron Aviation of $1.1 billion were up 12%, primarily due to higher volume and mix across the jet and commercial turboprop product lines.

Textron Aviation delivered 44 jets, up from 36 last year, and 44 commercial turboprops, up from 29 last year.

Segment profit was $106 million in the first quarter, up from $72 million a year ago, due to the higher volume and favorable performance.

Textron Aviation backlog at the end of the first quarter was $2.0 billion, up $204 million from year-end.

Bell

Bell revenues were $739 million, down 2% from last year, primarily on lower commercial volume.

Bell delivered 30 commercial helicopters in the quarter, down from 46 last year.

Segment profit of $104 million was up $17 million, primarily due to favorable performance.

Bell backlog at the end of the first quarter was $6.3 billion, up $459 million from year-end.

Textron Systems

Revenues at Textron Systems were $307 million, down from $387 million last year, reflecting lower TAPV deliveries at Textron Marine & Land Systems and lower Unmanned Systems volume.

Segment profit was down $22 million from last year’s first quarter, reflecting lower volume and lower net favorable program adjustments.

Textron Systems’ backlog at the end of the first quarter was $1.4 billion, down $62 million from year-end.

Industrial

Industrial revenues of $912 million decreased $219 million, largely related to the impact from the disposition of our Tools & Test product line and lower volume.

Segment profit was down $14 million from the first quarter of 2018, largely due to the impact from the product line disposition and lower volume, partially offset by favorable performance primarily related to the Specialized Vehicles product line.

Finance

Finance segment revenues were up $1 million, and profit was flat with last year’s first quarter.

Conference Call Information

Textron will host its conference call today, April 17, 2019 at 8:00 a.m. (Eastern) to discuss its results and outlook. The call will be available via webcast at www.textron.com or by direct dial at (800) 230-1951 in the U.S. or (612) 288-0340 outside of the U.S. (request the Textron Earnings Call).

In addition, the call will be recorded and available for playback beginning at 10:30 a.m. (Eastern) on Wednesday, April 17, 2019 by dialing (320) 365-3844; Access Code: 457170.

A package containing key data that will be covered on today’s call can be found in the Investor Relations section of the company’s website at www.textron.com.

About Textron Inc.

Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell, Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, Arctic Cat, Textron Systems, and TRU Simulation + Training. For more information visit: www.textron.com.

Forward-looking Information

Certain statements in this release and other oral and written statements made by us from time to time are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which may describe strategies, goals, outlook or other non-historical matters, or project revenues, income, returns or other financial measures, often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “guidance,” “project,” “target,” “potential,” “will,” “should,” “could,” “likely” or “may” and similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. In addition to those factors described in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under “Risk Factors”, among the factors that could cause actual results to differ materially from past and projected future results are the following: Interruptions in the U.S. Government’s ability to fund its activities and/or pay its obligations; changing priorities or reductions in the U.S. Government defense budget, including those related to military operations in foreign countries; our ability to perform as anticipated and to control costs under contracts with the U.S. Government; the U.S. Government’s ability to unilaterally modify or terminate its contracts with us for the U.S. Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, or, under certain circumstances, to withhold payment or suspend or debar us as a contractor eligible to receive future contract awards; changes in foreign military funding priorities or budget constraints and determinations, or changes in government regulations or policies on the export and import of military and commercial products; volatility in the global economy or changes in worldwide political conditions that adversely impact demand for our products; volatility in interest rates or foreign exchange rates; risks related to our international business, including establishing and maintaining facilities in locations around the world and relying on joint venture partners, subcontractors, suppliers, representatives, consultants and other business partners in connection with international business, including in emerging market countries; our Finance segment’s ability to maintain portfolio credit quality or to realize full value of receivables; performance issues with key suppliers or subcontractors; legislative or regulatory actions, both domestic and foreign, impacting our operations or demand for our products; our ability to control costs and successfully implement various cost-reduction activities; the efficacy of research and development investments to develop new products or unanticipated expenses in connection with the launching of significant new products or programs; the timing of our new product launches or certifications of our new aircraft products; our ability to keep pace with our competitors in the introduction of new products and upgrades with features and technologies desired by our customers; pension plan assumptions and future contributions; demand softness or volatility in the markets in which we do business; cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or, operational disruption; difficulty or unanticipated expenses in connection with integrating acquired businesses; the risk that acquisitions do not perform as planned, including, for example, the risk that acquired businesses will not achieve revenue and profit projections; and the impact of changes in tax legislation.

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