Textron reports profit, revenue increase in 2Q

TEXTRON INC.'S revenue and profit increased in the second quarter, even though sales of the V-22 aircraft in the Bell Helicopter division were flat over the year. / COURTESY BELL HELICOPTER
TEXTRON INC.'S revenue and profit increased in the second quarter, even though sales of the V-22 aircraft in the Bell Helicopter division were flat over the year. / COURTESY BELL HELICOPTER

PROVIDENCE – Profit at Textron Inc. rose 6 percent in the second quarter, and revenue climbed 8.1 percent.
The manufacturer released its earnings report Friday, posting profit of $177 million, or 65 cents per share, in the quarter that ended July 2, compared with profit of $167 million, or 60 cents per share, in the year-ago quarter.
Revenue reached $3.5 billion from $3.2 billion a year ago.
“Revenues were up at Systems, Industrial and Textron Aviation despite a challenging global environment, reflecting our continued investment in new products and acquisitions,” Textron Chairman and CEO Scott C. Donnelly said in a statement.
Among the four manufacturing divisions, all with the exception of Bell helicopter reported revenue increases over the year, and only Textron Aviation and Bell had profit declines during the same period.
Textron Aviation had the greatest revenue at $1.2 billion, a 6.4 percent increase, while its profit fell nearly 8 percent, to $81 million. This division delivered 45 new Citation jets and 23 King Air turboprops in the quarter, compared with 36 jets and 30 King Airs in last year’s second quarter. The company blamed the profit drop on an “unfavorable impact from the mix of products sold in the period.”
Textron Systems saw its revenue climb to $487 million, a 51.2 percent increase, primarily due to higher volumes in weapons and sensors, and unmanned systems product lines. This division’s profit rose 185.7 percent to $60 million, “reflecting the higher volumes and mix,” the company said.
Higher volumes boosted Industrial revenue and profit, with the former growing 8.3 percent to $1 billion, and the latter rising 15.1 percent to $99 million.
Bell’s revenue fell 5.4 percent to $804 million, while profit fell 19.8 percent to $81 million, due to lower volume. Bell delivered six V-22s in the quarter, flat with last year, and nine H-1s, compared with six H-1s last year, as well as 24 commercial helicopters compared with 39 last quarter.
Finance division revenue fell, to $20 million from $24 million, while profit dropped to $7 million from $10 million.
Total segment profit – including the four manufacturing divisions and finance – rose 7.2 percent to $328 million.

Net cash, which is provided by operating activities of continuing operations of the manufacturing group, fell to $107 million from $183 million during second quarter of 2015.
Textron reiterated its 2016 earnings per share from continuing operations expectation of $2.60 to $2.80, not including the estimated impact related to a tax settlement. On July 11, the U.S. Internal Revenue Service Office of Appeals approved a final settlement for the company’s 1998 to 2008 tax years, which will affect third-quarter results.
In the third quarter, Textron expects to record an income tax benefit, including reversal of accrued interest, of approximately $315 million, of which approximately $200 million, or 74 cents per share, is attributable to continuing operations.
“We are confirming our full-year operating outlook, as we continue to believe that our new products and acquisitions will contribute to solid overall growth in revenue, earnings and cash this year,” Donnelly continued.

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