Textron Inc. (TXT) posted a narrower GAAP net loss of $63 million, compared to a loss of $209 million in the year-ago quarter. Excluding certain special items, earnings per share came in at 15 cents, which surpassed the Zacks Consensus Estimate of 9 cents derived from 10 covering analysts.
However, the company offered a disappointing outlook for 2010 and said that it expects earnings from continuing operations of 30 cents to 50 cents per share, significantly below the Zacks Consensus Estimate of 80 cents. Textron also said that it expects revenues in 2010 to reach approximately $10.8 billion with free cash flow of $500 – $550 million. Shares of Textron have slipped more than 6% to $19.75 on the New York Stock Exchange.
During the fourth quarter of 2009, revenues fell 20.7% to $2.8 billion from $3.5 billion in the year-ago quarter. The Cessna segment’s revenues plunged 42.9% year-over-year to $855 million, while Bell segment’s revenues declined 6.0% to $802 million primarily due to sluggish volumes.
Revenues for the Industrial segment decreased to $572 million from $598 million in the year-ago quarter due to lower volumes and lower pricing, while Finance segment revenues also reduced to $82 million from $148 million over the same period. However, the only bright spot was the Textron Systems segment, which witnessed a 10.8% growth in revenues to $502 million primarily due to the higher defense volumes.
In terms of segment profits, Cessna and Bell’s operating income slipped to $28 million and $84 million from $198 million and $94 million, respectively, in-line with sluggish volumes and unfavorable product mix. However, Textron Systems witnessed a 14% increase in operating profits on account of better volumes, while Industrial Systems swung to an operating income of $18 million from an operating loss of $24 million due to strict management initiatives to reduce costs.
Textron ended the quarter with cash and cash equivalents of $1.7 billion, compared to $531 million of cash in the year-ago period. During the quarter, the company deployed $593 million towards debt repayment and $73 million towards capital expenditure.
We currently have a Neutral recommendation on Textron’s shares
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