Diversified U.S. conglomerate,
) announced strong second quarter 2012 earnings of 58 cents per
share versus 29 cents per share in the year-ago quarter. The
quarterly result also comfortably surpassed the Zacks Consensus
Estimate of 44 cents. Higher numbers for the company were due to
strong performance at Bell, continued improvement at Cessna,
complemented by good performance in the Industrial business.
Textron clocked quarterly revenue of $3.02 billion clearing both
the Zacks Consensus Estimate of $2.97 billion and year-ago
quarterly revenue of $2.73 billion. The year-over-year quarterly
upward spike in revenue of 10.7% is attributable to higher
performance from all of its manufacturing business segments,
barring Textron Systems. The performance of the Finance division
was also higher than the year-ago quarter.
Cessna: The revenue from this division during the reported quarter
increased $111 million year over year to approximately $763
million. In the reported quarter the company delivered 49 new
Citation jets, compared with 38 in the year ago quarter. Segment
profit increased $30 million to $35 million, primarily due to
higher volume. Cessna backlog at the end of the second quarter was
$1.5 billion, down $196 million from the first quarter of 2012
Bell: The revenue from this division during the reported quarter
increased $184 million to $1.06 billion. The upside came primarily
from the delivery of 47 commercial helicopters compared with 22
units in last year's second quarter. Bell also delivered 9 V-22 and
6 H-1 aircraft in the quarter compared with 9 V-22's and 8 H-1's in
last year's second quarter. Segment profit increased $32 million to
$152 million, primarily reflecting higher volume and favorable mix
in our commercial business. Bell backlog at the end of the second
quarter was $6.7 billion, down $394 million from the first quarter
Textron Systems: The revenue from this division during the reported
quarter decreased $63 million to $389 million. Segment profit
decreased $9 million to $40 million, reflecting lower volumes and
higher deliveries on lower-margin contracts. Textron Systems'
backlog at the end of the second quarter was $2.7 billion, up $1.2
billion from the first quarter of 2012.
Industrial: The revenue from this division increased $37 million
during the quarter to $756 million from $719 million in the
year-ago quarter. Revenue benefited from higher volumes partially
offset by unfavorable foreign exchange. This resulted in segmental
profit rising by $6 million to $61 million, primarily due to the
Finance: The revenue from this division increased $22 million to
$55 million. The segment reported a profit of $22 million compared
to a $33 million loss in last year's second quarter.
Cash and cash equivalents of the company, as of June 30, 2012, were
$898 million versus $871 million as of December 31, 2011. Capital
expenditure during the quarter was $85 million versus $91 million
in the year-ago quarter. Long-term debts of the company as of June
30, 2012 were $1.81 billion, reflecting a decline of $504 million
from year-end 2011 level.
Textron reaffirmed its 2012 earnings per share from continuing
operations guidance in a band of $1.80 to $2.00 per share. The
company also reaffirmed its manufacturing free cash flow before
pension contribution forecast for 2012 in a range of $700 million
to $750 million. The company anticipates planned pension
contributions of about $200 million.
Based in Providence, the Rhode Island, Textron Inc. is a global
multi-industry company that manufactures aircraft, automotive
engine components, and industrial tools. The company continues to
enjoy a strong backlog at its business divisions. Textron was able
to secure a few important contracts during the quarter. The most
noticeable among them were the Canadian Tactical Armored Patrol
Vehicle, the U.S. Navy's Ship-to-Shore Connector, upgrades to the
U.S. Army's Shadow TUAS, and an agreement with
Berkshire Hathaway Inc.
) to provide up to 150 Citation Latitudes for their fleet.
Textron currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating. Considering the fundamentals, we are
maintaining our Neutral recommendation on the stock. This is in
line with its peers like
Tyco International Ltd.
United Technologies Corporation
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