- EPS of $0.76, up 5.6% year over
year
- Segment profit of $294 million, up 5.4%
from prior year
- Operating margin of 9.5%, up from 8.5%
a year ago
- $202 million returned to shareholders
through share repurchases
Textron Inc. (NYSE: TXT) today reported first quarter 2019 net
income of $0.76 per share, compared to $0.72 per share in the first
quarter of 2018.
“Our results in the quarter were driven by growth and
performance at Aviation and continued strong execution at Bell,
which resulted in significant margin improvements at those
segments,” said Textron Chairman and CEO Scott C. Donnelly.
Cash Flow
Net cash used by operating activities of the manufacturing group
for the first quarter totaled $196 million, compared to $53 million
of net cash used last year. Manufacturing cash flow before
pension contributions, a non-GAAP measure that is defined and
reconciled to GAAP in an attachment to this release, reflected a
use of cash of $291 million compared to a use of cash of $158
million last year.
In the quarter, Textron returned $202 million to shareholders
through share repurchases.
Outlook
Textron confirmed its 2019 earnings per share from continuing
operations guidance of $3.55 to $3.75 and its expectation for cash
flow from continuing operations of the manufacturing group before
pension contributions of $700 to $800 million with planned pension
contributions of about $50 million.
Donnelly continued, “The company remains on track for a strong
2019 as we continue our focus on operational improvement and
earnings growth.”
First Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation of $1.1 billion were up 12%,
primarily due to higher volume and mix across the jet and
commercial turboprop product lines.
Textron Aviation delivered 44 jets, up from 36 last year, and 44
commercial turboprops, up from 29 last year.
Segment profit was $106 million in the first quarter, up from
$72 million a year ago, due to the higher volume and favorable
performance.
Textron Aviation backlog at the end of the first quarter was
$2.0 billion, up $204 million from year-end.
Bell
Bell revenues were $739 million, down 2% from last year,
primarily on lower commercial volume.
Bell delivered 30 commercial helicopters in the quarter, down
from 46 last year.
Segment profit of $104 million was up $17 million, primarily due
to favorable performance.
Bell backlog at the end of the first quarter was $6.3 billion,
up $459 million from year-end.
Textron Systems
Revenues at Textron Systems were $307 million, down from $387
million last year, reflecting lower TAPV deliveries at Textron
Marine & Land Systems and lower Unmanned Systems volume.
Segment profit was down $22 million from last year’s first
quarter, reflecting lower volume and lower net favorable program
adjustments.
Textron Systems’ backlog at the end of the first quarter was
$1.4 billion, down $62 million from year-end.
Industrial
Industrial revenues of $912 million decreased $219 million,
largely related to the impact from the disposition of our Tools
& Test product line and lower volume.
Segment profit was down $14 million from the first quarter of
2018, largely due to the impact from the product line disposition
and lower volume, partially offset by favorable performance
primarily related to the Specialized Vehicles product line.
Finance
Finance segment revenues were up $1 million, and profit was flat
with last year’s first quarter.
Conference Call Information
Textron will host its conference call today, April 17, 2019 at
8:00 a.m. (Eastern) to discuss its results and outlook. The call
will be available via webcast at www.textron.com or by direct dial
at (800) 230-1951 in the U.S. or (612) 288-0340 outside of the U.S.
(request the Textron Earnings Call).
In addition, the call will be recorded and available for
playback beginning at 10:30 a.m. (Eastern) on Wednesday, April 17,
2019 by dialing (320) 365-3844; Access Code: 457170.
A package containing key data that will be covered on today’s
call can be found in the Investor Relations section of the
company’s website at www.textron.com.
About Textron Inc.
Textron Inc. is a multi-industry company that leverages its
global network of aircraft, defense, industrial and finance
businesses to provide customers with innovative solutions and
services. Textron is known around the world for its powerful brands
such as Bell, Cessna, Beechcraft, Hawker, Jacobsen, Kautex,
Lycoming, E-Z-GO, Arctic Cat, Textron Systems, and TRU Simulation +
Training. For more information visit: www.textron.com.
Forward-looking Information
Certain statements in this release and other oral and written
statements made by us from time to time are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements, which may
describe strategies, goals, outlook or other non-historical
matters, or project revenues, income, returns or other financial
measures, often include words such as “believe,” “expect,”
“anticipate,” “intend,” “plan,” “estimate,” “guidance,” “project,”
“target,” “potential,” “will,” “should,” “could,” “likely” or “may”
and similar expressions intended to identify forward-looking
statements. These statements are only predictions and involve known
and unknown risks, uncertainties, and other factors that may cause
our actual results to differ materially from those expressed or
implied by such forward-looking statements. Given these
uncertainties, you should not place undue reliance on these
forward-looking statements. Forward-looking statements speak only
as of the date on which they are made, and we undertake no
obligation to update or revise any forward-looking statements. In
addition to those factors described in our Annual Report on Form
10-K and our Quarterly Reports on Form 10-Q under “Risk Factors”,
among the factors that could cause actual results to differ
materially from past and projected future results are the
following: Interruptions in the U.S. Government’s ability to fund
its activities and/or pay its obligations; changing priorities or
reductions in the U.S. Government defense budget, including those
related to military operations in foreign countries; our ability to
perform as anticipated and to control costs under contracts with
the U.S. Government; the U.S. Government’s ability to unilaterally
modify or terminate its contracts with us for the U.S. Government’s
convenience or for our failure to perform, to change applicable
procurement and accounting policies, or, under certain
circumstances, to withhold payment or suspend or debar us as a
contractor eligible to receive future contract awards; changes in
foreign military funding priorities or budget constraints and
determinations, or changes in government regulations or policies on
the export and import of military and commercial products;
volatility in the global economy or changes in worldwide political
conditions that adversely impact demand for our products;
volatility in interest rates or foreign exchange rates; risks
related to our international business, including establishing and
maintaining facilities in locations around the world and relying on
joint venture partners, subcontractors, suppliers, representatives,
consultants and other business partners in connection with
international business, including in emerging market countries; our
Finance segment’s ability to maintain portfolio credit quality or
to realize full value of receivables; performance issues with key
suppliers or subcontractors; legislative or regulatory actions,
both domestic and foreign, impacting our operations or demand for
our products; our ability to control costs and successfully
implement various cost-reduction activities; the efficacy of
research and development investments to develop new products or
unanticipated expenses in connection with the launching of
significant new products or programs; the timing of our new product
launches or certifications of our new aircraft products; our
ability to keep pace with our competitors in the introduction of
new products and upgrades with features and technologies desired by
our customers; pension plan assumptions and future contributions;
demand softness or volatility in the markets in which we do
business; cybersecurity threats, including the potential
misappropriation of assets or sensitive information, corruption of
data or, operational disruption; difficulty or unanticipated
expenses in connection with integrating acquired businesses; the
risk that acquisitions do not perform as planned, including, for
example, the risk that acquired businesses will not achieve revenue
and profit projections; and the impact of changes in tax
legislation.
TEXTRON INC.Revenues by Segment
and Reconciliation of Segment Profit to Net Income(Dollars in
millions, except per share amounts)(Unaudited)
Three Months Ended
March 30, 2019
March 31, 2018
REVENUES
MANUFACTURING: Textron Aviation $ 1,134 $ 1,010 Bell 739 752
Textron Systems 307 387 Industrial 912 1,131
3,092 3,280 FINANCE 17 16
Total revenues $ 3,109 $
3,296
SEGMENT
PROFIT
MANUFACTURING: Textron Aviation $ 106 $ 72 Bell 104 87 Textron
Systems 28 50 Industrial 50 64 288 273
FINANCE 6 6
Segment
Profit 294 279 Corporate expenses and
other, net (47 ) (27 ) Interest expense, net for Manufacturing
group (35 ) (34 ) Income before income taxes
212 218 Income tax expense (33 ) (29 )
Net
income 179 189 Earnings per share:
Net income $ 0.76
$ 0.72 Diluted average shares
outstanding 236,437,000
263,672,000
Textron Inc.Condensed
Consolidated Balance Sheets(In millions)(Unaudited)
March 30,2019
December 29,2018
Assets Cash and
equivalents $ 646 $ 987 Accounts receivable, net 1,059 1,024
Inventories 4,047 3,818 Other current assets 835 785 Net property,
plant and equipment 2,523 2,615 Goodwill 2,141 2,218 Other assets
2,267 1,800 Finance group assets 962
1,017 Total Assets $ 14,480
$ 14,264
Liabilities and
Shareholders' Equity Short-term debt and current portion of
long-term debt $ 363 $ 258 Current liabilities 3,069 3,248 Other
liabilities 2,186 1,932 Long-term debt 2,812 2,808 Finance group
liabilities 817
826 Total Liabilities 9,247 9,072 Total Shareholders' Equity
5,233 5,192 Total
Liabilities and Shareholders' Equity $ 14,480
$ 14,264
TEXTRON
INC.MANUFACTURING GROUPCondensed Schedule of Cash
Flows(In millions)(Unaudited)
Three Months Ended
March 30,2019
March 31,2018
Cash flows from operating activities: Net
income $ 175 $ 179 Depreciation and
amortization 100 103 Changes in working capital (554 ) (376 )
Changes in other assets and liabilities and non-cash items 33 (9 )
Dividends received from TFC 50
50 Net cash from
operating activities (196 )
(53 )
Cash flows from investing
activities: Capital expenditures (59 ) (77 ) Net proceeds from
corporate-owned life insurance policies 2 58 Proceeds from the sale
of property, plant and equipment 1
9 Net cash from
investing activities (56 )
(10 )
Cash flows from financing
activities: Increase in short-term debt 100 2 Purchases of
Textron common stock (202 ) (344 ) Other financing activities, net
4
3 Net cash from financing activities
(98 ) (339 ) Total
cash flows (350 ) (402 ) Effect of exchange rate changes on cash
and equivalents 9
11
Net change in cash and
equivalents (341 ) (391 ) Cash and equivalents at beginning of
period 987
1,079 Cash and equivalents at end of period $
646 $ 688
Manufacturing Cash Flow Before Pension
Contributions GAAP to Non-GAAP Reconciliation:
Three Months Ended
March 30,2019
March 31,2018
Net cash from operating activities - GAAP $ (196 ) $ (53 )
Less: Capital expenditures (59 ) (77 ) Dividends received from TFC
(50 ) (50 ) Plus: Total pension contributions 13 13 Proceeds from
the sale of property, plant and equipment 1
9
Manufacturing cash flow before pension contributions - Non-GAAP
(a) $ (291 ) $
(158 ) (a) Manufacturing cash flow before
pension contributions is a non-GAAP financial measure as defined in
"Non-GAAP Financial Measures" attached to this release.
TEXTRON INC.Condensed Consolidated Schedule of
Cash Flows(In millions)(Unaudited)
Three Months Ended
March 30,2019
March 31,2018
Cash flows from operating activities: Net
income $ 179 $ 189 Depreciation and
amortization 102 105 Changes in working capital (529 ) (369 )
Changes in other assets and liabilities and non-cash items
32
(10 ) Net cash from operating activities (216
) (85 )
Cash flows
from investing activities: Capital expenditures (59 ) (77 ) Net
proceeds from corporate-owned life insurance policies 2 58 Finance
receivables repaid 12 16 Other investing activities, net
3 9
Net cash from investing activities (42
) 6
Cash flows
from financing activities: Increase in short-term debt 100 2
Principal payments on long-term debt and nonrecourse debt (19 ) (19
) Purchases of Textron common stock (202 ) (344 ) Other financing
activities, net 5
3 Net cash from financing activities
(116 )
(358 ) Total cash flows (374 ) (437 ) Effect of exchange
rate changes on cash and equivalents 9
11
Net change
in cash and equivalents (365 ) (426 ) Cash and equivalents at
beginning of period 1,107
1,262 Cash and equivalents at
end of period $ 742 $
836
TEXTRON
INC.Non-GAAP Financial Measures(Dollars in millions,
except per share amounts) We supplement the reporting of our
financial information determined under U.S. generally accepted
accounting principles (GAAP) with certain non-GAAP financial
measures. These non-GAAP financial measures exclude certain
significant items that may not be indicative of, or are unrelated
to, results from our ongoing business operations. We believe that
these non-GAAP measures may be useful for period-over-period
comparisons of underlying business trends and our ongoing business
performance, however, they should be used in conjunction with GAAP
measures. Our non-GAAP measures should not be considered in
isolation or as a substitute for the related GAAP measures, and
other companies may define similarly named measures differently. We
encourage investors to review our financial statements and
publicly-filed reports in the entirety and not to rely on any
single financial measure. We utilize the following definition for
the non-GAAP financial measure included in this release:
Manufacturing
cash flow before pension contributions
Manufacturing cash flow before pension
contributions adjusts net cash from operating activities (GAAP) for
the following:
• Deducts capital expenditures and
includes proceeds from the sale of property, plant and equipment to
arrive at the net capital investment required to support ongoing
manufacturing operations;
• Excludes dividends received from Textron
Financial Corporation (TFC) and capital contributions to TFC
provided under the Support Agreement and debt agreements as these
cash flows are not representative of manufacturing operations;
• Adds back pension contributions as we
consider our pension obligations to be debt-like liabilities.
Additionally, these contributions can fluctuate significantly from
period to period and we believe that they are not representative of
cash used by our manufacturing operations during the period.
• Excludes taxes paid related to the gain
realized in 2018 on the Tools and Test business disposition. We
have made this adjustment to the non-GAAP measure because we
believe this use of cash is not representative of cash used by our
manufacturing operations.
While we believe this measure provides a focus on cash generated
from manufacturing operations, before pension contributions, and
may be used as an additional relevant measure of liquidity, it does
not necessarily provide the amount available for discretionary
expenditures since we have certain non-discretionary obligations
that are not deducted from the measure.
Manufacturing
Cash Flow Before Pension Contributions GAAP to Non-GAAP
Reconciliation and 2019 Outlook:
Three Months Ended
March 30, 2019
March 31, 2018
Net cash from operating activities - GAAP $
(196 ) $ (53 ) Less:
Capital expenditures (59 ) (77 ) Dividends received from TFC (50 )
(50 ) Plus: Total pension contributions 13 13 Proceeds from the
sale of property, plant and equipment 1 9
Manufacturing cash flow before pension contributions -
Non-GAAP $ (291 ) $ (158
)
2019 Outlook
Net cash from operating activities of continuing operations -
GAAP $ 1,070 - $ 1,170 Less:
Capital expenditures
(380)
Dividends received from TFC
(50)
Plus: Total pension contributions
50
Taxes paid on gain on business disposition
10
Manufacturing cash flow before pension
contributions - Non-GAAP $ 700 -
$ 800
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190417005118/en/
Investor Contacts:Eric Salander – 401-457-2288Jeffrey
Trivella – 401-457-2288Media Contact:David Sylvestre –
401-457-2362
Textron (NYSE:TXT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Textron (NYSE:TXT)
Historical Stock Chart
From Jul 2023 to Jul 2024