Textron releases third quarter results

Textron released its third quarter earnings on Thursday that said revenues were $2.86 billion, up 12.3 percent compared to last year. Segment profits, excluding the impairment charges, were $265 million, up 25 percent from the third quarter of 2004, according to a release from the company.

Adjusted earnings were $1.00 per share on a fully diluted basis compared to the company’s guidance of $0.85 to $0.95. Hurricane Katrina, which shut down production at the company’s Louisiana-based facilities, reduced earnings by about $0.09 per share during the quarter compared to prior guidance.

Including the fastening systems impairment charges, worth $2.25 per basic share, Textron recorded a Generally Accepted Accounting Principles (GAAP) loss of $1.23 per basic share. On a GAAP basis, total company segment losses were $76 million.

“Very strong performance at Bell, Cessna and Textron Financial overcame operating issues in the quarter at fastening systems and the challenges arising from Katrina,” said Textron chairman, president and CEO Lewis Campbell.

Manufacturing cash flow from continuing operations for the first nine months of 2005 was $691 million, compared to $797 million during the same period last year, resulting in free cash flow for the first nine months of 2005 of $486 million, compared to $606 million last year.

Textron expects fourth quarter earnings per share will be between $0.95 and $1.15. This reflects an estimated unfavorable impact of an additional $0.07 per share during the fourth quarter associated with restoring production in Louisiana.

In September, the company approved a plan to explore strategic alternatives for the fastening systems segment, which triggered an impairment review of the value of fastening systems assets. As a result, charges of $341 million ($299 million, after-tax), substantially all of which related to goodwill impairment, were recorded against fastening systems segment profit in the third quarter.

Bell segment revenues were up $104 million, while profit was up $30 million.

Bell Helicopter ended the quarter at $2.9 billion, up slightly from the end of the second quarter.

Cessna segment revenues and profit increased $191 million and $35 million, respectively.

Fastening systems revenues were up $3 million, primarily as a result of higher pricing related to steel recoveries and favorable foreign exchange.

In industrial businesses, segment revenue decreased by $11 million and profit was down $21 million.


The finance segment revenues increased $26 million, while profit increased $15 million.

A conference call held Thursday morning will be available for playback beginning at 12:30 on Thursday by dialing (320) 365-3844; Access Code: 772173.

The Providence-based Textron Inc. is a $10 billion multi-industry company with 44,000 employees in 40 countries. More information is available at www.textron.com.