Textron Reports Second Quarter 2018 Income from Continuing Operations of $0.87 per Share; Raises Full-Year EPS and Cash Guidance

  • Income from continuing operations of $0.87 per share
  • Segment profit $346 million
  • Operating margin of 9.3%, up from 8.2% a year ago
  • $571 million returned to shareholders through share repurchases
  • Full-year EPS guidance increased to $3.15 - $3.35 per share, up $0.20
  • Full-year cash flow guidance increased to $750 - $850 million, up $50 million

PROVIDENCE, R.I. — (BUSINESS WIRE) — July 18, 2018 — Textron Inc. (NYSE: TXT) today reported second quarter 2018 income from continuing operations of $0.87 per share. This compares to $0.57 per share in the second quarter of 2017, or $0.60 per share of adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release.

“Operationally, we saw continued strength in our execution with margin improvements at Aviation, Systems, and Bell,” said Textron Chairman and CEO Scott C. Donnelly. “We are encouraged by revenue growth resulting from improving commercial demand across many of our end markets.”

Cash Flow

Net cash provided by operating activities of continuing operations of the manufacturing group for the second quarter totaled $468 million, compared to $413 million in last year’s second quarter. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, totaled $399 million compared to $341 million during last year’s second quarter.

In the quarter, Textron returned $571 million to shareholders through share repurchases, compared to $143 million in the second quarter of 2017.

Outlook

Textron now expects 2018 earnings per share from continuing operations to be in a range of $3.15 to $3.35, up $0.20 from our previous outlook. The company also expects full-year 2018 cash flow from continuing operations of the manufacturing group before pension contributions to be in a range of $750 to $850 million, up $50 million from its previous expectation.

Textron expects a one-time gain of approximately $400 million from the Tools & Test divestiture in the third quarter of 2018, which is not reflected in this updated outlook.

“Our updated outlook reflects our strong first-half performance and the continuation of our strategy of growth through new product investments and acquisitions to increase long-term shareholder value,” Donnelly concluded.

Second Quarter Segment Results

Textron Aviation

Revenues at Textron Aviation of $1.3 billion were up 9%, primarily due to higher volume and price.

Textron Aviation delivered 48 jets, up from 46 last year, and 47 commercial turboprops, up from 33 last year.

Segment profit was $104 million in the second quarter, up from $54 million a year ago, due to the favorable volume, mix, and price.

Textron Aviation backlog at the end of the second quarter was $1.6 billion.

Bell

Bell revenues were $831 million, up 1% primarily on higher commercial volume, partially offset by lower military revenues.

Bell delivered 57 commercial helicopters in the quarter, up from 21 last year.

Segment profit of $117 million was up $5 million.

Bell backlog at the end of the second quarter was $5.5 billion.

Textron Systems

Revenues at Textron Systems were $380 million, down from $477 million last year, largely on lower volumes at Weapons & Sensors related to the discontinuance of SFW production in 2017 and lower TAPV deliveries at Textron Marine & Land Systems.

Segment profit was down $2 million, primarily reflecting the lower net volume partially offset by favorable performance.

Textron Systems’ backlog at the end of the second quarter was $1.2 billion.

Industrial

Industrial revenues increased $109 million largely related to higher volumes across all of our product lines and a favorable impact from foreign exchange.

Segment profit was down $2 million despite the increase in revenues from the second quarter of 2017, due to the mix of products sold.

Finance

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