Textron’s Revenue Declines in Q1, But Witnesses Improved Bottom Line Due To Aviation

by Trefis Team
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 Textron (NYSE:TXT) Textron reported earnings on the 17th of April. Textron beat earnings mainly on the back of the aviation segment, which grew to $1.1 billion, with higher volumes seen from both the jet and turboprop segments.  The aviation unit delivered 44 jets, this up from 36 jets during the same period last year. The Bell helicopter unit saw a decline with 30 deliveries, this down from 44 units last year. Textron’s industrial and systems segment continued to see weakness during the quarter on the back of weak demand. The industrial segment in general has been struggling due to a lack of demand.

We currently have a price estimate of $60 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.

Key Takeaways for Textron’s Q1 Earnings:

-Earnings per share came in at $0.76, primarily as a result of a stronger aviation segment.

– Revenue declined though, 2% yoy, this was driven by lower revenue in the Systems, Bell, and Industrial units for Textron. This decline was offset by a 12% jump in the core aviation segment.

-Operating margin came in 9.5%, while operating cash flow for the quarter came in at $196 mil.

-Long term debt remained flat at $2.8 billion.

-We expect that EPS  will come in around $3.60-3.70 for the year.

Going forward, we expect the Aviation segment to continue to see stronger demand, while the rest of the sectors will continue to struggle. With EPS coming in higher than the previous year, we expect that it will lead to improved performance for the stock; which then will bring the price closer to our estimate.


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