Textron 1Q profit falls 29% on Beechcraft acquisition impact
TEXTRON INC. reported Thursday that its first-quarter profit fell 28.6 percent to $85 million, compared with $119 million in the first quarter of 2013, due partly to acquisition costs related to the company's purchase in March of Beechcraft Corp. Above, Beechcraft's Bonanza G36.
PROVIDENCE – Textron Inc. – parent company of Bell Helicopter, Cessna Aircraft Co. and Textron Systems – reported that its net income dropped 28.6 percent in the first quarter to $85 million, or 30 cents per diluted share, due in part to restructuring costs incurred by the manufacturer’s acquisition in March of Beech Holdings LLC.
During the same three-month period in 2013, Textron posted total net income of $119 million, or 41 cents per diluted share.
Revenue was largely unchanged in the first quarter, falling three-tenths of a percent to $2.85 billion from $2.86 billion in the first quarter last year. Manufacturing revenue alone totaled $2.82 billion, a slight increase over the $2.81 billion reported for the same period a year earlier.
Within the manufacturing section, Textron Aviation (which includes the company’s Cessna business and the newly acquired Beechcraft Corp.) reported revenue of $785 million, 10.9 percent higher than the segment profit of $708 million during the same quarter last year. Textron’s Industrial segment increased revenue by 9.6 percent to $797 million.
The two manufacturing segments that posted revenue declines for the first quarter were Bell Helicopter, which fell 8 percent to $873 million, and Textron Systems, which fell 15.4 percent to $363 million.
The largest year-over-year decline was posted in Textron’s finance section, which saw revenue drop 31 percent to $29 million from $42 million in 2013.
Scott C. Donnelly, chairman and CEO of Textron, said the revenue declines in Bell and Textron Systems were expected, due to lower orders for commercial and military helicopters and Textron’s unmanned aircraft and marine and land systems.
In the first quarter, Textron completed its acquisition of Witchita, Kan.-based planemaker Beechcraft Corp., which resulted in transaction and restructuring costs totaling $16 million, and reduced first-quarter income by 5 cents per share, Textron said.
Earlier this month, Textron announced it was cutting 750 jobs from its Textron Aviation unit following the Beechcraft acquisition.
Full-year 2014 acquisition and restructuring costs resulting from the Beechcraft purchase will be approximately $46 million. Textron adjusted its forecast for 2014 revenue to reflect this impact, projecting that earnings per share from continuing operations are expected to be in the range of $1.92 to $2.12, revised from the previous estimate of $2 to $2.20.