Textron (TXT) Beats on Q3 Earnings, Ups '23 EPS View
Textron Inc. TXT reported third-quarter 2023 adjusted earnings of $1.49 per share, which surpassed the Zacks Consensus Estimate of $1.27 by 17.3%. The bottom line also improved 29.6% from the year-ago quarter’s recorded figure.
The company reported GAAP earnings of $1.35 per share, up from $1.06 registered in the third quarter of 2022.
Revenues
TXT reported total revenues of $3,343 million, which missed the Zacks Consensus Estimate of $3,448.8 million by 3.1%. However, the reported figure increased 8.6% from the year-ago quarter’s level of $3,078 million.
Manufacturing revenues improved 8.6% year over year to $3,330 million. Revenues in the Finance division surged 18.2% to $13 million.
Textron Inc. Price, Consensus and EPS Surprise
Textron Inc. price-consensus-eps-surprise-chart | Textron Inc. Quote
Segmental Performance
Textron Aviation: Revenues from this segment increased 14.7% year over year to $1,338 million. The increase was primarily driven by higher volume and pricing.
The segment generated an operating profit of $160 million in the quarter under review compared with $131 million in the year-ago period. This improvement can be attributed to favorable pricing, net of inflation and a favorable impact from higher volume and mix.
Textron Aviation delivered 39 jets, in line with the year-ago quarter’s figure. It also delivered 38 commercial turboprops, up from 33 in the third quarter of 2022.
The segment’s order backlog at the end of the quarter totaled $7.4 billion.
Bell: Revenues from this segment amounted to $754 million, in line with the year-ago quarter’s reported number. This was due to higher military volume.
The segment’s profit increased 4% to $77 million, driven by lower research and development costs.
Bell delivered 23 commercial helicopters in the quarter, down from 49 last year. Its order backlog at the end of the quarter totaled $5.2 billion, down sequentially from $5.6 billion.
Textron Systems: This segment’s revenues totaled $309 million, up 5.8% from the year-ago period’s level. This improvement was driven by higher volume.
Segmental profits increased 32.3% year over year to $41 million, primarily driven by a favorable impact from performance.
Textron Systems’ backlog at the end of the third quarter totaled $2 billion.
Industrial: Revenues from this segment improved 8.6% to $922 million, driven by higher volume and mix at both Kautex and Textron Specialized Vehicles, as well as a favorable impact from pricing.
Moreover, the segment’s profit totaled $51 million compared with $36 million in the prior-year quarter. The improvement can be attributed to a higher volume and mix as well as a favorable impact from pricing, and net of inflation.
Textron eAviation: Revenues from the segment totaled $7 million, up 40% year over year. Meanwhile, it reported a loss of $19 million in the third quarter, wider than a reported loss of $7 million in the prior-year period.
Finance: This segment’s revenues improved 18.2% to $13 million. Its profit totaled $22 million in the third quarter compared with $7 million in the year-ago period.
Financials
As of Sep 30, 2023, cash and cash equivalents totaled $1,671 million compared with $1,963 million as of Dec 31, 2022.
Cash flow from operating activities amounted to $737 million as of Sep 30, 2023, compared with $945 million in the year-ago period.
Capital expenditures amounted to $79 million compared with $78 million in the prior-year period.
The long-term debt was $2,824 million as of Sep 30, 2023, compared with $3,175 million as of Dec 31, 2022.
Guidance
Textron has raised its guidance for 2023 adjusted earnings per share to $5.45-$5.55 from the earlier projected range of $5.20-$5.30. The Zacks Consensus Estimate for TXT’s 2023 earnings is pegged at $5.27 per share, which lies below the company’s guided range.
Zacks Rank
Textron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Q3 Defense Earnings
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Net sales were $16.88 billion, which beat the Zacks Consensus Estimate of $16.66 billion by 1.3%. The top line also rose 1.8% from $16.58 billion reported in the year-ago quarter.
RTX Corporation’s RTX third-quarter 2023 adjusted earnings per share of $1.25 beat the Zacks Consensus Estimate of $1.19 by 5%. The bottom line also improved 3.3% from the year-ago quarter’s level of $1.21.
RTX’s third-quarter adjusted sales of $18,952 million beat the Zacks Consensus Estimate of $18,709 million by 1.3%.
Hexcel Corporation HXL reported third-quarter 2023 adjusted earnings of 38 cents per share, which missed the Zacks Consensus Estimate of 42 cents by 9.5%. However, the bottom line improved 15.2% from the year-ago quarter’s level of 33 cents.
Net sales were $420 million, which missed the Zacks Consensus Estimate of $431 million by 2.6%. However, the top line improved 15% from the year-ago quarter’s level of $365 million.
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