Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,434.64 26.10 0.16%
S&P 500 1,868.54 3.69 0.20%
NASDAQ 4,103.32 7.80 0.19%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,512.38 -3.89 -0.03%
TOPIX 1,171.40 -1.97 -0.17%
HANG SENG 22,760.24 64.23 0.28%

Textron Reports First Quarter Earnings



  Textron Reports First Quarter Earnings

                 Adjusts Outlook for Soft Business Jet Demand

Business Wire

PROVIDENCE, R.I. -- April 17, 2013

Textron Inc. (NYSE: TXT) today reported first quarter 2013 income from
continuing operations of $0.40 per share, compared to $0.41 per share in the
first quarter of 2012. Total revenues in the quarter were $2.86 billion,
approximately flat with the first quarter of 2012.

Segment profit was $235 million, down $24 million from the first quarter of
2012. First quarter 2013 manufacturing cash flow before pension contributions
reflected a use of cash of $425 million compared to a use of cash of $106
million during the first quarter of 2012. The company contributed $140 million
to its pension plans during the first quarter.

“We saw strong growth in Bell commercial helicopters, Textron Systems defense
products, and E-Z-GO vehicles, but demand in the business jet market was
softer than expected,” said Textron Chairman and CEO Scott C. Donnelly.

Outlook

Donnelly continued, “Based on current business jet market conditions, we are
reducing our 2013 business jet delivery outlook and now expect that deliveries
will be down this year compared to 2012. This reflects our expectation for
lower deliveries in the light category, partially offset by growth in the
midsize category. Accordingly, we are adjusting production schedules and
implementing other appropriate cost actions at Cessna.”

“While we are taking these immediate actions, we believe the global business
jet market still has significant long-term growth potential and we remain
committed to our new product plans, which include introduction of the M2, and
new Sovereign and Citation X models later this year, as well as the Latitude
in 2015 and the Longitude in 2017.”

Textron’s 2013 guidance for earnings per share from continuing operations is
now $1.90 to $2.10 and cash flow from continuing operations of the
manufacturing group before pension contributions is expected to be
approximately $400 million, with planned pension contributions of about $200
million.

First Quarter Segment Results

Cessna

Revenues at Cessna increased $39 million, primarily the result of higher used
aircraft sales. Cessna delivered 32 new jets in the quarter down from 38 units
in last year’s first quarter.

Cessna recorded a segment loss of $8 million in the first quarter compared to
a segment loss of $6 million a year-ago.

Cessna backlog at the end of the first quarter was $1.03 billion, down $28
million from the end of 2012.

Bell

Bell revenues decreased $45 million, primarily the result of lower military
unit deliveries and lower commercial aftermarket sales. Bell delivered 9
V-22’s and 6 H-1’s in the quarter, compared to 10 V-22’s and 7 H-1’s in last
year’s first quarter and delivered 40 commercial helicopters, up from 30 units
last year.

Segment profit decreased $16 million, primarily reflecting the lower military
deliveries and commercial aftermarket volumes.

Bell backlog at the end of the first quarter was $7.08 billion, down $386
million from the end of 2012.

Textron Systems

Revenues at Textron Systems increased $52 million, reflecting higher Unmanned
Aircraft Systems and Weapons and Sensors volumes, partially offset by lower
vehicle deliveries within Land and Marine. Segment profit increased $3
million.

Textron Systems’ backlog at the end of the first quarter was $2.79 billion,
down $134 million from the end of 2012.

Industrial

Industrial revenues decreased $28 million, primarily due to lower Fuel Systems
and Functional Components product line volumes, reflecting lower automotive
demand in Europe and Asia. Segment profit decreased $16 million reflecting the
lower volume and an unfavorable mix.

Finance

Finance segment revenues decreased $19 million compared to the first quarter
of 2012, reflecting a smaller finance receivable portfolio.

The Finance segment reported a profit of $19 million compared to $12 million
in the first quarter of 2012.

Other

Textron’s first quarter tax rate benefitted primarily from the impact of the
re-enactment of the U.S. research and development credit.

Conference Call Information

Textron will host its conference call today, April 17, 2013 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) 230-1092 in the U.S. or
(612) 234-9960 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, 2013 by dialing (320) 365-3844;
Access Code: 265925.

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 Helicopter, Cessna Aircraft Company, Jacobsen,
Kautex, Lycoming, E-Z-GO, Greenlee, and Textron Systems. More information is
available at www.textron.com.

Non-GAAP Measures

Manufacturing cash flow before pension contributions is a non-GAAP measure
that is defined and reconciled to GAAP in an attachment to this release.

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 under “Risk
Factors” in our Annual Report on Form 10-K, among the factors that could cause
actual results to differ materially from past and projected future results are
the following: 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 and of assets acquired upon foreclosure 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; increases in pension expenses or employee and retiree medical
benefits; difficult conditions in the financial markets which may adversely
impact our customers’ ability to fund or finance purchases of our products;
and continued demand softness or volatility in the markets in which we do
business.

TEXTRON INC.

Revenues by Segment and Reconciliation of Segment Profit to Net Income

Three Months Ended March 30, 2013 and March 31, 2012

(Dollars in millions, except per share amounts)

(Unaudited)
 
                                           Three Months Ended
                                           March 30, 2013      March 31, 2012
REVENUES                                                    
MANUFACTURING:
         Cessna                            $ 708               $ 669
         Bell                                949                 994
         Textron Systems                     429                 377
         Industrial                          727                 755          
                                             2,813               2,795
                                                                
FINANCE                                      42                  61           
         Total revenues                    $ 2,855             $ 2,856        
                                                                
SEGMENT PROFIT
MANUFACTURING:
         Cessna                            $ (8          )     $ (6          )
         Bell                                129                 145
         Textron Systems                     38                  35
         Industrial                          57                  73           
                                             216                 247
                                                                
FINANCE                                      19                  12           
         Segment Profit                      235                 259
                                                                
Corporate expenses and other, net            (55         )       (47         )
Interest expense, net for                    (37         )       (35         )
Manufacturing group
                                                                
Income from continuing operations            143                 177
before income taxes
Income tax expense                           (28         )       (57         )
                                                                
Income from continuing operations            115                 120
   Discontinued operations, net of           4                   (2          )
   income taxes
Net Income                                 $ 119               $ 118          
                                                                
Earnings per share:
   Income from continuing operations       $ 0.40              $ 0.41
   Discontinued operations, net of           0.01                (0.01       )
   income taxes
   Net income                              $ 0.41              $ 0.40         
                                                                
         Diluted Average shares              288,978,000         294,632,000  
         outstanding
                                                                
                                                                

Textron Inc.
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)
                                                               
                                                                   
                                                  March 30,       December 29,
                                                  2013            2012
Assets
Cash and equivalents                            $ 701           $ 1,378
Accounts receivable, net                          954             829
Inventories                                       2,972           2,712
Other current assets                              445             470
Net property, plant and equipment                 2,134           2,149
Other assets                                      3,165           3,173
Finance group assets                              2,186           2,322
        Total Assets                            $ 12,557        $ 13,033
                                                                   
                                                                   
Liabilities and Shareholders' Equity
Short term debt and current portion of          $ 426           $ 535
long-term debt
Other current liabilities                         2,776           2,977
Other liabilities                                 2,619           2,798
Long-term debt                                    1,749           1,766
Finance group liabilities                         1,839           1,966
        Total Liabilities                         9,409           10,042
                                                                   
Total Shareholders' Equity                        3,148           2,991
        Total Liabilities and Shareholders'     $ 12,557        $ 13,033
        Equity
                                                                   
                                                                   

TEXTRON INC.
MANUFACTURING GROUP
Condensed Schedule of Cash Flows and Manufacturing Cash Flow GAAP to Non-GAAP
Reconciliations
(In millions)
(Unaudited)
                                                          
                                                         Three Months Ended
                                                         March 30,   March 31,
                                                         2013        2012
Cash flows from operating activities:
Income from continuing operations                        $ 103       $  110
Dividends received from TFC                                20           240
Capital contributions paid to TFC                          -            (240 )
Depreciation and amortization                              92           84
Changes in working capital                                 (529  )      (275 )
Changes in other assets and liabilities and non-cash       (154  )      (96  )
items
Net cash from operating activities of continuing           (468  )      (177 )
operations
Cash flows from investing activities:
Capital expenditures                                       (77   )      (73  )
Other investing activities, net                            (18   )      -     
Net cash from investing activities                         (95   )      (73  )
Cash flows from financing activities:
Principal payments on long-term debt                       (312  )      -
Increase in short-term debt                                205          -
Other financing activities, net                            6            4     
Net cash from financing activities                         (101  )      4     
Total cash flows from continuing operations                (664  )      (246 )
Total cash flows from discontinued operations              (4    )      (1   )
Effect of exchange rate changes on cash and                (9    )      4     
equivalents
Net change in cash and equivalents                         (677  )      (243 )
Cash and equivalents at beginning of period                1,378        871   
Cash and equivalents at end of period                    $ 701       $  628   
                                                                      
Manufacturing Cash Flow GAAP to Non-GAAP
Reconciliations:
                                                                      
Net cash from operating activities of continuing         $ (468  )   $  (177 )
operations - GAAP
Less: Capital expenditures                                 (77   )      (73  )
Dividends received from TFC                                (20   )      (240 )
Plus: Capital contributions paid to TFC                    -            240
Total pension contributions                                140          144   
Manufacturing cash flow before pension                   $ (425  )   $  (106 )
contributions- Non-GAAP
                                                                      
                                                         2013 Outlook
Net cash from operating activities of continuing         $770
operations - GAAP
Less: Capital expenditures                               (550)
Dividends received from TFC                              (20)
Plus: Total pension contributions                        200
Manufacturing cash flow before pension                   $400
contributions- Non-GAAP

Free cash flow is a measure generally used by investors, analysts and
management to gauge a company’s ability to generate cash from operations in
excess of that necessary to be reinvested to sustain and grow the business and
fund its obligations. Our definition of Manufacturing free cash flow adjusts
net cash from operating activities of continuing operations for dividends
received from TFC, capital contributions provided under the Support Agreement,
capital expenditures, proceeds from the sale of property, plant and equipment
and contributions to our pension plans. We believe that our calculation
provides a relevant measure of liquidity and is a useful basis for assessing
our ability to fund operations and obligations. This measure is not a
financial measure under GAAP and should be used in conjunction with GAAP cash
measures provided in our Consolidated Statement of Cash Flows.

TEXTRON INC.
Condensed Consolidated Schedule of Cash Flows
(In millions)
(Unaudited)
                                                                      
                                                         Three Months Ended
                                                         March 30,   March 31,
                                                         2013        2012
Cash flows from operating activities:
Income from continuing operations                        $ 115       $  120
Depreciation and amortization                              97           91
Changes in working capital                                 (440  )      (370 )
Changes in other assets and liabilities and non-cash       (167  )      (94  )
items
Net cash from operating activities of continuing           (395  )      (253 )
operations
Cash flows from investing activities:
Finance receivables repaid                                 72           154
Proceeds from sales of receivables and other finance       28           62
assets
Finance receivables originated or purchased                -            (18  )
Capital expenditures                                       (77   )      (73  )
Other investing activities, net                            (7    )      (2   )
Net cash from investing activities                         16           123   
Cash flows from financing activities:
Principal payments on long-term and nonrecourse debt       (482  )      (144 )
Increase in short-term debt                                205          -
Proceeds from issuance of long-term debt                   41           27
Other financing activities, net                            6            5     
Net cash from financing activities                         (230  )      (112 )
Total cash flows from continuing operations                (609  )      (242 )
Total cash flows from discontinued operations              (4    )      (1   )
Effect of exchange rate changes on cash and                (9    )      4     
equivalents
Net change in cash and equivalents                         (622  )      (239 )
Cash and equivalents at beginning of period                1,413        885   
Cash and equivalents at end of period                    $ 791       $  646   

Contact:

Textron Inc.
Investor Contacts:
Doug Wilburne, 401-457-2288
or
Justin Bourdon, 401-457-2288
or
Media Contact:
Mike Maynard, 401-457-2474
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement