PROVIDENCE, R.I. - Textron Inc . (NYSE: NYSE:TXT) has reported a 5.94% fall in share price after announcing first-quarter earnings that fell slightly short of analyst expectations.
The company's adjusted earnings per share (EPS) for the first quarter stood at $1.20, which was $0.02 below the analyst estimate of $1.22. However, Textron's revenue reached $3.14 billion, missing the projected consensus of $3.3 billion.
The company's performance was buoyed by growth in segment profit, which rose to $290 million, a $31 million increase from the prior year. This profit growth was attributed to strong market demand in the Aviation sector, leading to a $177 million backlog growth, and revenue growth in the Bell segment, driven by the Future Long-Range Assault Aircraft (FLRAA) program.
Textron Chairman and CEO Scott C. Donnelly highlighted the profit growth across the company's Aviation, Bell, and Systems businesses. He cited the continued strong market demand in Aviation and the FLRAA program's contribution to Bell's revenue growth as key factors in the quarter's success.
Looking ahead, Textron has set its sights on the second quarter of 2024 with an EPS guidance range of $6.20 to $6.40, exceeding the analyst consensus of $5.91.
Textron Aviation's revenues rose to $1.2 billion, a $39 million increase from the same quarter last year, reflecting higher pricing and a slight uptick in jet deliveries. Bell's revenues also saw a significant boost, climbing to $727 million, which was $106 million higher than the first quarter of 2023, largely due to the FLRAA program.
Despite the overall positive results, Textron did face some challenges. The Industrial segment's revenues declined by $40 million compared to the previous year, primarily due to lower volume and mix in the Specialized Vehicles product line. Additionally, the company experienced a net cash use by operating activities of $30 million, compared to $153 million in cash provided last year.
Textron's forward-looking strategy includes additional severance costs in the second quarter of 2024, ranging from $25 million to $30 million, mainly related to headcount reductions in the Industrial segment. This is part of an expanded restructuring plan aimed at improving cost structures in response to program cancellations.
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