What To Expect From Textron’s Q2 Earnings

Textron (NYSE:TXT) is all set to report Q2 earnings on July 18. While lagging through some of 2017, the company managed to start the financial year off with a bang. In the previous quarter, the conglomerate posted financials that exceeded expectations by a notable margin. It posted a modest 7% rise in revenues, while earnings came in a mammoth 95% higher than the same period in the previous year. The jump in earnings was a result of a significant increase in sales of its business jets and turboprop aircraft. We expect a similar momentum to carry forward into the second quarter as well.

At the moment, Textron’s stock price is trading at around $67, much in line with our price estimate. We have created an interactive dashboard analysis to help best relay our method and reasoning. Don’t agree with us? Click on the link to change key drivers and come up with your own price estimate.

Industrial Revenues To Jump On New Product Offerings

Within the quarter, Textron introduced a number of new innovations that are expected to boost sales. For starters, the segment introduced a number of new models of its E-Z-GO Express personal transport vehicles. It also released new variants of the Cushman Shuttle personnel carriers and the pure-utility Textron Off Road Prowler Pro vehicle. Apart from this, we expect the segment’s GSE product line to continue to drive sales in the second quarter as well.

Aviation Set To Soar Yet Again

After a significant lull over the last few quarters, Aviation seems to have finally gotten a footing once again. In the previous quarter, sales at Aviation grew by about 4% to about $1,010 million. The rise in revenues was primarily attributable to the significant jump in commercial turboprop deliveries. We expect this momentum to carry into Q2 as well; solid order growth and improved delivery figures will see revenues at the segment jump by a modest amount.

Bell Could Have Run Out Of Steam

After a sluggish few quarters, Bell had been showing a reversal trend over the last few months. In fact, in the previous quarter alone, the segment produced an 8% growth in revenues. That said, it seems as though this reversal was short lived. Commercial helicopter order influx seems to have reduced in Q2, while contract inflows at its military programs from the Pentagon slowed. For these reasons, we believe that the segment’s performance will weigh on overall revenues.