Expect Another Weak Quarter From Textron

 Textron’s (NYSE:TXT)  results are expected to come in weaker for the quarter with the Bell and Industrial segments expected to show weakness. The stock is down from $71 in August, and has seen limited growth, and expansion as an uncompetitive industrial segment has weighed on sales, and earnings.  Fourth quarter estimates expect sales to come in at $1.033 billion,  and earnings per share for the quarter to come in at $0.98.

We currently have a price estimate of $57 per share for the company, which is higher than the market price. View our interactive dashboard for Textron Q4 2018 and modify the key drivers to visualize the impact on Textron’s price.

Textron has been struggling throughout the last year, with global sales slowing, and its mistimed acquisition of Arctic Cat, which has been a drain on Textron’s cash. Textron is expected to see a restructuring charge of $60-$85 million in the fourth quarter resulting from the Arctic Cat acquisition. The fourth quarter has witnessed the global economy slowing and this is expected to be the primary reason for the slowdown in the quarter.

We don’t believe Textron will beat expectations for the quarter. The helicopter market in general has been showing signs of weakness, throughout the previous quarters, and this trend is expected to continue, which we expect to weigh on growth for the quarter. In addition the industrial sector, which sells a range of products from dune buggys, airport ground support systems, plastics, is expected to continue to show weakness throughout the quarter. The company has struggled throughout the year with the majority of its segments showing little to no growth.

Overall, we don’t expect a strong quarter for Textron as revenue weakness continues.

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