Diversified U.S. conglomerate,
) announced third quarter 2012 earnings of 48 cents per share, up
6.7% from 45 cents per share in the year-ago quarter. The quarterly
result however came below the Zacks Consensus Estimate of 52 cents.
Higher numbers year over year for the company were due to strong
performance at Bell, continued improvement at Cessna, complemented
by good performance in the Industrial business and favorable
liquidation activity in the finance portfolio. Including
discontinued operations, earnings came in at 51 cents compared with
47 cents a share earned in the year-ago quarter.
In the reported quarter, Textron clocked quarterly revenue of $3.00
billion, up 6.6% from $2.81 billion in the year-ago period. However
this came below the Zacks Consensus Estimate of $3.05 billion. The
year-over-year quarterly upward spike in revenue is attributable to
higher performance from all of its manufacturing business segments,
barring Textron Systems. The performance of the Finance division
was also better than the year-ago quarter.
Cessna: The revenue from this division during the reported quarter
increased $7 million year over year to approximately $778 million.
In the reported quarter the company delivered 41 new Citation jets,
compared with 47 in the year-ago quarter. Revenues increased as
higher used aircraft sales more than offset a decline in new
Citation jet deliveries. Segment profit decreased $3 million to $30
million, primarily due to lower new jet volume. Cessna backlog at
the end of the third quarter was $1.3 billion, down $196 million
from the second quarter of 2012.
Bell: The revenue from this division during the reported quarter
increased $181 million to $1.08 billion. The upside came primarily
from the delivery of 46 commercial helicopters compared with 26
units in last year's third quarter. Bell also delivered 11 V-22 and
5 H-1 aircrafts in the quarter compared with 9 V-22's and 7 H-1's
in last year's third quarter. Segment profit increased $22 million
to $165 million, primarily reflecting higher volume. Bell backlog
at the end of the third quarter was $6.3 billion, down $434 million
from the second quarter of 2012.
Textron Systems: The revenue from this division during the reported
quarter decreased $62 million to $400 million. Segment profit
decreased $26 million to $21 million, reflecting charges associated
with unmanned aerial system contracts and lower volumes. Textron
Systems' backlog at the end of the third quarter was $2.9 billion,
up $263 million from the second quarter of 2012.
Industrial: The revenue from this division increased $28 million
during the quarter to $683 million from $655 million in the
year-ago quarter. Revenue benefited from higher volumes in golf,
turf and automotive businesses. This was partially offset by
unfavorable foreign exchange. This resulted in segmental profit
rising by $1 million to $38 million, primarily due to higher
Finance: The revenue from this division increased $32 million to
$64 million. The segment reported a profit of $28 million compared
to a $24 million loss in last year's third quarter.
Cash and cash equivalents of the company, as of September 29, 2012,
were $1.23 billion versus $871 million as of December 31, 2011.
Capital expenditure during the quarter was $156 million versus $102
million in the year-ago quarter. Long-term debts of the company as
of September 29, 2012 were $1.82 billion, reflecting a decline of
$496 million from the year-end 2011 level.
Textron raised its 2012 earnings per share from continuing
operations guidance to a band of $1.95 to $2.05 versus an earlier
band of $1.80 to $2.00 per share. The company however reaffirmed
its manufacturing free cash flow before pension contribution
forecast for 2012 in the range of $700 million to $750 million. The
company anticipates planned pension contributions of about $200
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 also
able to secure a few important contracts during the quarter.
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
TEXTRON INC (TXT): Free Stock Analysis Report
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