Textron Reports Fourth Quarter 2018 Results; Announces 2019 Financial Outlook

January 24, 2019

PROVIDENCE, R.I.--(BUSINESS WIRE)--Jan 24, 2019--Textron Inc. (NYSE: TXT) today reported fourth quarter 2018 income from continuing operations of $1.02 per share. Adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $1.15 per share for the fourth quarter of 2018. Adjusted income from continuing operations excludes $73 million of pre-tax special charges recorded in the fourth quarter ($0.23 per share, after-tax), and other favorable one-time adjustments ($0.10 per share, after-tax).

Full-year income from continuing operations was $4.83 per share. Full-year adjusted income from continuing operations, a non-GAAP measure, was $3.34 per share, up from $2.45 in 2017.

“We had strong execution in both the quarter and full year with significant margin improvements at Aviation, Bell, and Systems” said Textron Chairman and CEO Scott C. Donnelly. “We were also encouraged by the continued strength in new aircraft demand at Aviation.”

Cash Flow

Net cash provided by operating activities of continuing operations of the manufacturing group for the full year was $1,127 million, compared to $930 million last year. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $784 million compared to $872 million last year.

In the quarter, Textron returned $400 million to shareholders through share repurchases, compared to $131 million in the fourth quarter of 2017. For the full year, Textron returned $1.8 billion to shareholders through share repurchases, including $797 million of proceeds from the sale of our Tools & Test businesses, compared to $582 million in 2017.


Textron is forecasting 2019 revenues of approximately $14 billion, about flat with last year. Textron expects full-year 2019 earnings per share from continuing operations will be in the range of $3.55 to $3.75.

The company is estimating net cash provided by operating activities of continuing operations of the manufacturing group will be between $1,020 million and $1,120 million and manufacturing cash flow before pension contributions (a non-GAAP measure) will be between $700 million and $800 million, with planned pension contributions of about $50 million.

Donnelly continued, “Our outlook reflects the continued improvement in our operations to drive earnings growth and margin expansion. As we look to the future, we are investing for long-term growth to generate increases in shareholder value.”

Fourth Quarter Segment Results

Textron Aviation

Revenues at Textron Aviation of $1.6 billion were up 12%, due to higher volume and mix across the jet and commercial turboprop product lines, as well as favorable pricing.

Textron Aviation delivered 63 jets, up from 58 last year, and 67 commercial turboprops, up from 45 last year.

Segment profit was $170 million in the fourth quarter, up from $120 million a year ago, due to the higher volumes and favorable pricing.

Textron Aviation backlog at the end of the fourth quarter was $1.8 billion.


Bell revenues were $827 million, down from $983 million last year, primarily on lower military volume.

Bell delivered 46 commercial helicopters in the quarter, up from 45 last year.

Segment profit of $108 million was down $6 million, largely on the lower military volume, partially offset by favorable performance.

Bell backlog at the end of the fourth quarter was $5.8 billion.

Textron Systems

Revenues at Textron Systems were $345 million, down from $489 million last year, reflecting lower TAPV deliveries at Textron Marine & Land Systems and lower Unmanned Systems volume.

Segment profit was flat with last year’s fourth quarter at $37 million, with lower volume and mix, offset by favorable performance.

Textron Systems’ backlog at the end of the fourth quarter was $1.5 billion.


Industrial revenues decreased $131 million largely related to the disposition of our Tools & Test product line.

Segment profit was down $10 million from the fourth quarter of 2017, largely due to the impact from the disposition. Favorable performance, reflecting a positive impact of $17 million related to a patent infringement matter, was offset by unfavorable inflation and mix.


Finance segment revenues were up $3 million, and profit was up $3 million from last year’s fourth quarter.

Conference Call Information

Textron will host its conference call today, January 24, 2019 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) 230-1951 in the U.S. or (612) 288-0340 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 Thursday, January 24, 2019 by dialing (320) 365-3844; Access Code: 431863.

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, Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, Arctic Cat, Textron Systems, and TRU Simulation + Training. For more information visit: www.textron.com.

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 in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under “Risk Factors”, among the factors that could cause actual results to differ materially from past and projected future results are the following: Interruptions in the U.S. Government’s ability to fund its activities and/or pay its obligations; 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; 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; pension plan assumptions and future contributions; demand softness or volatility in the markets in which we do business; cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or, operational disruption; difficulty or unanticipated expenses in connection with integrating acquired businesses; the risk that acquisitions do not perform as planned, including, for example, the risk that acquired businesses will not achieve revenue and profit projections; and the impact of changes in tax legislation.

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CONTACT: Investor Contacts:

Eric Salander – 401-457-2288

Jeffrey Trivella – 401-457-2288

Media Contact:

David Sylvestre – 401-457-2362



SOURCE: Textron

Copyright Business Wire 2019.

PUB: 01/24/2019 06:30 AM/DISC: 01/24/2019 06:30 AM


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