Textron lowers guidance to reflect 34% drop in profits
TEXTRON INC. reported Friday that its third-quarter profits fell 34.4 percent to $99 million compared with $151 million in the third quarter of 2012. Attributing the drop to fewer Cessna aircraft sales and labor disruptions resulting from negotiations with bargained employees, Textron revised its guidance for 2013 earnings per share from continuing operations.
PROVIDENCE – Textron Inc. – parent of Bell Helicopter, Cessna Aircraft Co. and Textron Systems – reported third-quarter net income of $99 million, or 35 cents per diluted share, a 34.4 percent decrease from $151 million, or 51 cents per diluted share, in the third quarter of 2012.
The diversified manufacturer and finance company saw revenue fall 3.2 percent during the quarter to $2.9 billion. Manufacturing revenue alone totaled $2.87 billion, a 2.2 percent drop from manufacturing revenue reported for the second quarter of 2012.
Profits fell in the Cessna, Bell and finance segments during the three months ended September 28. The Cessna segment reported a loss of $23 million, compared with a segment profit of $30 million during the same quarter last year. Bell Helicopter’s segment profit fell 20.6 percent from $165 million in the third quarter of 2012 to $131 million during the 2013 third quarter.
The Textron Systems segment, which posted falling profits in the second quarter, saw profits rise 66.7 percent during the third quarter, to $35 million from $21 million in the 2012 third quarter. Profit for the company’s Industrial segment rose to $52 million in the third quarter, up 36.8 percent from $38 million during the same period last year.
For the first three quarters of 2013, Textron saw its bottom line fall 24.9 percent to $331 million, or $1.16 per diluted share. The company reported a revenue decrease of 3.1 percent from $8.9 billion during the first nine months of 2012 to $8.6 billion during the first nine months of 2013.
“We are reducing our 2013 guidance to reflect lower margins at Bell due to manufacturing inefficiencies associated with the labor disruptions resulting from negotiations with bargained employees and implementation of a new enterprise resource planning system, and lower aircraft deliveries at Cessna,” said Textron Chairman and CEO Scott C. Donnelly in a statement.
Textron’s revised guidance for 2013 earnings per share from continuing operations is $1.75 to $1.85, according to a company release. Cash flow continuing operations of the manufacturing group before pension contributions is expected to be between $200 million and $300 million, and expected pension contributions remain at roughly $200 million.
The company’s previous outlook for earnings per share from continuing operations guidance was $1.90 to $2.10 and its outlook for manufacturing cash flow before pension contributions was approximately $400 million.