- Revenue: $3.5 billion, up from $3.4 billion in last year's second quarter.
- Adjusted Income from Continuing Operations: $1.54 per share, compared to $1.46 per share in last year's second quarter.
- Manufacturing Cash Flow Before Pension Contributions: $320 million, compared to $242 million in the second quarter of 2023.
- Aviation Segment Revenue: $1.5 billion, up $113 million from the second quarter of 2023.
- Aviation Segment Profit: $195 million, up $24 million from the second quarter of 2023.
- Aviation Backlog: $7.5 billion, up $118 million from the first quarter of this year.
- Bell Segment Revenue: $794 million, up $93 million from last year.
- Bell Segment Profit: $82 million, up $17 million from last year's second quarter.
- Bell Backlog: $4.2 billion.
- Textron Systems Revenue: $323 million, up $17 million from last year's second quarter.
- Textron Systems Segment Profit: $35 million, down $2 million from a year ago.
- Textron Systems Backlog: $1.7 billion.
- Industrial Segment Revenue: $914 million, down $112 million from last year's second quarter.
- Industrial Segment Profit: $42 million, down $37 million from the second quarter of 2023.
- Textron eAviation Segment Revenue: $9 million.
- Textron eAviation Segment Loss: $18 million, compared to a segment loss of $12 million in the second quarter of 2023.
- Finance Segment Revenue: $12 million.
- Finance Segment Profit: $7 million.
- Share Repurchase: Approximately 4.1 million shares, returning $358 million in cash to shareholders in the quarter.
Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Textron Inc (TXT, Financial) reported revenues of $3.5 billion for the quarter, up from $3.4 billion in the same quarter last year.
- Adjusted income from continuing operations increased to $1.54 per share from $1.46 per share in the previous year's second quarter.
- Manufacturing cash flow before pension contributions rose to $320 million, compared to $242 million in the second quarter of 2023.
- Aviation segment revenues increased to $1.5 billion, with a profit of $195 million, up $24 million from the second quarter of 2023.
- Backlog in the Aviation segment ended the quarter at $7.5 billion, up $118 million from the first quarter of this year.
Negative Points
- Textron Inc (TXT) experienced lower revenues and operating profit in the Industrial segment due to softer demand in consumer and automotive end markets.
- Bell's commercial helicopter deliveries decreased to 32 from 35 in the same quarter last year.
- Textron Systems' segment profit decreased by $2 million from the previous year, despite higher revenues.
- The eAviation segment reported a loss of $18 million in the second quarter of 2024, compared to a loss of $12 million in the same quarter of 2023.
- Supply chain issues continue to impact performance, causing inefficiencies and delays in both the Aviation and Bell segments.
Q & A Highlights
Highlights from Textron Inc (TXT) Q2 2024 Earnings Call
Q: Scott, your booked-to-bill over one in aviation. Maybe you could just give us a little color on what you're seeing in the market environment and any color on pricing and what aftermarket also did in the quarter?
A: Sure, Peter. The end market continues to be robust with strong demand in jets and turboprops across all models. We saw a 13% growth in aftermarket revenues, indicating strong aircraft utilization. We expect continued strength in new launches like the Ascend.
Q: Your CapEx, I think you're $140 million for the first half of the year. Are you coming in at a slower pace or plans to step up?
A: We'll see growth in the second half of the year. We tend to be back-end loaded in CapEx, so there's a little opportunity in the full-year number, but for now, we'll stick with our guidance.
Q: Can you give us an update on supply chain at both Aviation and Bell?
A: It's still problematic with fewer issues than before, but some suppliers continue to cause delays. This affects factory flow and performance, but we are managing through it. Both Aviation and Bell are working hard to mitigate these challenges.
Q: Are you still expecting higher jet deliveries for the year?
A: Yes, we are still expecting higher unit deliveries in 2024 compared to 2023. We had some delays in Latitude deliveries, but those have now been resolved. Overall, we expect improved performance through the balance of the year.
Q: How do we think about the puts and takes as we go into the second half for Aviation profitability?
A: We expect continued strong margins on a year-over-year basis. While price inflation spread will get smaller, we will offset this with better efficiencies and performance through the factory.
Q: How do you think about V-22 and opportunities there elsewhere in the military side?
A: We see ongoing opportunities for V-22 and H-1 upgrades and modernization efforts. These programs will help maintain a solid base as we ramp up the FLRAA program.
Q: Can you talk about the aftermarket growth?
A: We saw a 13% growth in the aftermarket business, driven by strong demand and increased aircraft utilization. The military side also contributed significantly, particularly with the METS Program for the Navy.
Q: Are lead times getting long enough that it's an issue for some customers?
A: Lead times are balanced, and we are not at a competitive disadvantage. We continue to take orders into the out years, maintaining a book-to-bill above 1.
Q: Can you speak to the additional H-1 orders at Bell?
A: The Nigerian order was for 12 aircraft. We also see ongoing opportunities for V-22 enhancements and other military programs, but these are long-term dialogues and not immediate.
Q: Does it make sense to walk through the math on the Shadow decommission?
A: The Shadow program was about a $50 million business. We've largely absorbed the loss and have seen growth in other areas within systems to make up for it.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
