Textron’s Airplanes Segment Should Give Wings To Its Top Line In 2020

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Textron (NYSE:TXT) is a multi-industry company that designs and manufactures civilian and military helicopters, business jets, turboprop aircraft, piston-engine airplanes, golf cars, off-road and light transportation vehicles, turf care equipment, power tools, and a variety of defense products. The company also provides financing to promote sales of some of its products, including helicopters and airplanes. Trefis detail trends in Textron’s Revenues over the years along with our forecast for 2019 and 2020 in an interactive dashboard, parts of which are highlighted below. We believe that the company should reverse the trend of declining revenues seen over 2018 and 2019 this year, with its top line expanding by more than 3% to $14.7 billion.

 

A Quick Look At Textrons’s Revenues

The company sells its products directly as well as through a network of independent dealers. For many of its product lines (including Bell helicopters and Cessna and Beechcraft airplanes) the company also provides maintenance, repair and overhaul services. It has 5 primary operating segments:

  • Textron Aviation Textron Aviation is a leader in general aviation. Textron Aviation manufactures, sells and services Beechcraft and Cessna aircraft, and services the Hawker brand of business jets.
  • Bell commercial and military helicopters– Bell supplies advanced military helicopters and support to the U.S. Government and to military customers outside the United States. Bell is one of the leading suppliers of helicopters to the U.S. Government and, in association with Boeing, is the only supplier of military tilt-rotor aircraft.
  • Textron Systems- Textron Systems is a supplier to the defense, aerospace and general aviation markets. Its product lines consist of Unmanned Systems, Marine and Land systems, and Simulation, Training and Other.
  • Industrial- Industrial segment designs and manufactures a variety of products within the Fuel Systems and Functional Components and Specialized Vehicles product lines.
  • Finance- Finance segment is a commercial finance business that consists of Textron Financial Corporation (TFC) and its consolidated subsidiaries.The Finance segment provides financing primarily to purchasers of new and pre-owned Textron Aviation aircraft and Bell helicopters.

Its main competitors in its core markets are:

  • Bell commercial and military helicopters: Cicaré, Airbus, Boeing, Lockheed Martin.
  • Textron Aviation: Boeing, Airbus, Embraer, Bombardier.

 

Textron’s Revenues Decline In 2018, And Are Also Expected To Come In Lower For 2019

  • Textron’s revenue decreased by $226 Million in 2018
  • Its revenues are expected to decrease by $51 Million in 2019.
  • We expect an overall revenue growth of 3% in 2020 with a bulk of the revenue growth coming from Cessna and Bell divisions due to the healthy order book.

 

Comparing Textron’s revenue trend with its peers.

For more information on how Textron’s revenue growth compares with Honeywell, Boeing and Lockheed Martin, view our interactive dashboard analysis.

 

(A) Revenue from Cessna & Beechcraft Airplane segment to increase by 6.3% from $5.0 Billion in 2018 to $5.3 Billion in 2019, with its share in revenue to to remain at 38% in 2019 from 36% in 2018.

  • The segment has two principal product lines: aircraft and aftermarket parts and services.
  • Aircraft includes sales of business jets, turboprop aircraft, piston engine aircraft, and military trainer and defense aircraft.
  • Aftermarket parts and services includes commercial parts sales, and maintenance, inspection and repair services.

 

(B) Revenue from Bell Helicopter segment to increase by 2.2% from $3.2 Billion in 2018 to $3.3 Billion in 2019, with its share in revenue to remain stable at 23% in 2019.

  • Bell Helicopter is one of the leading suppliers of military and commercial helicopters, tiltrotor aircraft, and related spare parts and services all over the world.
  • Bell produces a variety of commercial aircraft types, including light single- and twin-engine helicopters and medium
    twin-engine helicopters.
  • In addition, the 525 Relentless, Bell’s first super-medium commercial helicopter, continues flight test activities with certification targeted in late 2019.

Additional details about how revenues for Textron’s Helicopter segment have trended over the years are available in our interactive dashboard.

 

(C) Revenue from Textron Systems segment to decrease by 8.2% from $1.5 Billion in 2018 to $1.3 Billion in 2019, with its share in revenue to remain stable at 10% in 2019.

  • This segment sells products to U.S. Government customers and to customers outside the U.S. through foreign military sales sponsored by the U.S. Government and directly through commercial sales channels.
  • In October 2018, TRU Simulation + Training entered into a letter of intent to form a joint venture with FlightSafety International to provide training solutions for Textron Aviation’s business and general aviation aircraft.

 

(D) Revenue from Industrial segment to decrease by 4.9% from $4.3 Billion in 2018 to $4.1 Billion in 2019, with its share in revenue to decrease to 29% in 2019 from 31% in 2018

Data around Textron’s Industrial Segment Revenues over the years is available in our interactive dashboard.

 

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