) is scheduled to report its first-quarter 2014 results before
the opening bell on May 1. Textron had posted an earnings
surprise of 1.69% in the preceding quarter. Let's see how things
are shaping up prior to this announcement.
Factors at Play
Textron has a strong presence in diverse areas of business jets
and other general aviation aircraft, helicopter, aircraft
engines, golf carts, turf maintenance equipment, electronic test
equipment and blow-molded fuel tanks.
2013 was an important year for Textron which saw new product
introductions and investments in future growth. The 2014 guidance
at Cessna calls for a $3.3 billion revenue which represents
approximately 18.5% growth driven solely by new product
Textron completed the acquisition of Beech Holdings, LLC, the
parent of Beechcraft Corporation, in March this year. Under this
transaction, it acquired all outstanding equity interests in
Beech Holdings for approximately $1.4 billion in cash. The
company expects solid growth from the new business segment formed
by the merger of its own Cessna segment with the newly acquired
However, with plans to cut almost half a billion in defense
spending over the next decade, Textron's performance, like other
defense primes, is bound to be affected. Textron generally
produces considerable revenues from the U.S. government. Amid
budget deficits and political uncertainties, the fortunes of the
company remain volatile. Again, Textron's military rotorcraft
sales this year are expected to be lower than the 2013 level.
Accordingly, our proven model does not conclusively show that
Textron is likely to beat earnings this quarter. That is because
a stock needs to have both a positive
(Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for
this to happen. That is not the case here.
The Earnings ESP for Textron is -5.00% since the Most Accurate
estimate is 38 cents while the Zacks Consensus Estimate is pegged
higher at 40 cents.
Zacks Rank #2 (Buy):
We note that stocks with Zacks Ranks #1, 2 and 3 have a
significantly higher chance of beating earnings. The Sell-rated
stocks (#4 and 5) should never be considered going into an
The combination of Textron's Zacks Rank #2 (Buy) and -5.00% ESP
makes surprise prediction difficult.
Other Stocks to Consider
Here are some companies you may want to consider as our model
shows that they have the right combination of elements, i.e., a
positive Zacks Earnings ESP and a Zacks Rank #1, #2 or #3.
TASER International Inc.
) has an Earnings ESP of +25.00% and holds a Zacks Rank #2 (Buy).
TASER will report first quarter earnings on Apr 30.
Wesco Aircraft Holdings, Inc.
) has an Earnings ESP of +3.03% and holds a Zacks Rank #3 (Hold).
Wesco Aircraft will report first quarter earnings on May 6.
Northrop Grumman Corp.
) reported first quarter adjusted earnings of $2.40 per share,
surpassing the Zacks Consensus Estimate of $2.15 by 11.6%. The
stock currently holds a Zacks Rank #2 (Buy).
NORTHROP GRUMMN (NOC): Free Stock Analysis
TASER INTL INC (TASR): Free Stock Analysis
TEXTRON INC (TXT): Free Stock Analysis Report
WESCO AIRCRAFT (WAIR): Free Stock Analysis
To read this article on Zacks.com click here.