Textron (TXT) Tops Q2 Earnings & Revenues, Retains View
Diversified U.S. conglomerate Textron Inc. TXT reported second-quarter 2016 earnings from continuing operations of 66 cents per share, beating the Zacks Consensus Estimate of 63 cents by 4.8%. Earnings were also up 10% from 60 cents per share reported in the year-ago quarter.
Revenues
Total revenue in the quarter was $3,511 million, beating the Zacks Consensus Estimate of $3,331 million by 5.4%. Reported revenues also climbed 8.1% from the year-ago figure of $3,247 million primarily on account of higher contribution from Textron Aviation, Textron Systems and Industrial.
Manufacturing revenues were up 8.3% to $3,491 million while revenues at the Finance division tanked 16.7% to $20 million during the quarter.
Segment Performance
Textron Aviation: Revenues during the second quarter increased 6.4% to $1,196 million from $1,124 million in the year-ago quarter owing to volume and mix.
The company delivered 45 new Citation jets and 23 King Air turboprops, compared with 36 jets and 30 King Airs in the prior-year quarter.
The segment registered profit of $81 million, compared with $88 million in the year-ago quarter. Order backlog at the end of the first quarter was $1.1 billion, reflecting a sequential increase of $122 million.
Bell: Segment revenues were $804 million, down from the year-ago level of $850 million.
The segment delivered 24 commercial helicopters, compared with 39 units in the prior-year period. Bell also delivered 6 V-22s (unchanged) and 9 H-1s (from 6 in the second-quarter 2015).
Segment profit tumbled 19.8% to $81 million. Bell’s order backlog at the end of the quarter was $4.9 billion, down by $376 million from the first quarter.
Textron Systems: Revenues at this division during the reported quarter were $487 million, up 51.2% year over year. The upside was mainly due to higher volumes of Weapons and Sensors, and Unmanned Systems.
Segment profit of $60 million increased from $21 million a year ago.
Textron Systems’ backlog at the end of the second quarter was $2.3 billion, down by $242 million from the end of the first quarter.
Industrial: Segment revenues increased 8.3% to $1,004 million driven by higher volumes and acquisitions. Segment profit improved 15.1% to $99 million.
TEXTRON INC Price, Consensus and EPS Surprise
TEXTRON INC Price, Consensus and EPS Surprise | TEXTRON INC Quote
Financials
As of Jul 2, 2016, cash and cash equivalents were $661 million, compared with $946 million as of Jan 2, 2016.
Capital expenditure during the quarter was $119 million compared with $94 million in the year-ago quarter. Long-term debt was $2,785 million, as of Jul 2, 2016, up from $2,435 million as of Jan 2, 2016.
Guidance
Textron maintained its 2016 earnings per share guidance in the range of $2.60 to $2.80.
The company continues to expect cash flow from continuing operations (of the manufacturing group) before pension contributions in the $600–$700 million band.
Textron currently carries a Zacks Rank #4 (Sell).
Upcoming Releases
The Boeing Company BA, Northrop Grumman Corp. NOC and General Dynamics Corporation GD are all scheduled to release second-quarter 2016 results on Jul 27.
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