Textron Reports Mixed Q4, Faces Challenges In Aviation And Industrial Segments

Textron Inc TXT shares are trading lower after the company reported fourth-quarter results.

Sales grew to $3.613 billion, missing the consensus of $3.81 billion, although adjusted EPS of $1.34 was in line with the consensus.

Textron Aviation’s revenues stood at $1.3 billion, down $242 million year-over-year on lower volume and mix of $282 million. Textron Aviation’s backlog came in at $7.8 billion.

Bell revenues stood at $1.1 billion, up $58 million Y/Y, on higher military and support program revenues of $67 million mainly led by higher volume on the FLRAA program. Bell backlog stood at $7.5 billion.

Industrial revenues stood at $869 million (down $92 million Y/Y), owing to lower volume.

For FY24, the operating cash flow of the manufacturing group was $1.0 billion. As of December 28, cash and cash equivalents stood at $1.39 billion.

In the fourth quarter, Textron repurchased shares worth $232 million, resulting in 2024 share repurchases of $1.1 billion.

In December, Textron disclosed a strategic review of its powersports product line within the Industrial segment, leading to the indefinite suspension of production.

Consequently, the company recorded total pre-tax special charges of $53 million and a $38 million inventory valuation charge in the fourth quarter to write down powersports-related inventory.

FY25 Outlook: Textron expects GAAP EPS from continuing operations of $5.19-$5.39 or $6.00 -$6.20 on an adjusted basis (vs. consensus of $6.42) and revenue of $14.7 billion (vs. $14.757 billion estimate).

Textron projects cash flow from continuing operations of the manufacturing group of $1.2 billion and $1.3 billion.

Scott C. Donnelly, Chairman and CEO, said, “While a work stoppage at Textron Aviation impacted our 2024 financial results, we saw strong order activity, aftermarket growth, and continued new product development activities with the announcement of the Gen3 family of light jets.”

“2024 was a challenging year with a strike at Aviation and difficult end markets in our Industrial segment. Our 2025 outlook of higher revenue and margin reflects a stabilized production line with improved productivity at Textron Aviation, growth across our aerospace and defense businesses driven by new product development, and an improved cost structure at our Industrial segment,” Donnelly concluded.

Investors can gain exposure to the stock via First Trust Exchange-Traded Fund First Trust Indxx Aerospace & Defense ETF MISL and iShares U.S. Aerospace & Defense ETF ITA.

Price Action: TXT shares are down 3.63% at $78.25 premarket at the last check Wednesday.

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