PROVIDENCE – Textron Inc. reported net income of $1.2 billion for 2018, nearly quadrupling its 2017 earnings of $307 million, according to a company release Thursday.
Earnings per diluted share for 2018 were $4.83, compared with $1.14 the previous year.
The increase in profit comes despite a dip in revenue, which fell 1.6 percent to $14 billion in 2018.
Two items changed dramatically from 2017 to 2018. Income tax expense in 2018 totaled $162 million, compared with $456 million in 2017, which included a one-time charge of $266 million due to the federal tax law change enacted at the end of the year (after fully analyzing the effects of the tax law change, the company recorded a tax benefit in the fourth quarter of 2018 of $14 million). The company also recorded an after-tax gain of $419 million on the sale of its Tools & Test Equipment product line in July.
In December 2018, the company approved a plan to restructure its specialized vehicles business in its industrial segment, incurring $73 million in special charges consisting of: $47 million in asset impairment charges; contract termination and “other” costs of $18 million; and severance and related costs of $8 million.
The company incurred restructuring costs of 90 million in 2017 in the continuation of a 2016 restructuring plan and $40 million in restructuring, integration and transaction costs of the company’s Arctic Cat acquisition.
Textron said it had returned $1.8 billion to shareholders through share repurchases compared with $582 million in share repurchases in 2017.
“We had strong execution in both the quarter and full year with significant margin improvements at Aviation, Bell and Systems” stated Textron Chairman and CEO Scott C. Donnelly. “We were also encouraged by the continued strength in new aircraft demand at Aviation.”
Textron Aviation revenue increased 6.1 percent over the year to $5 billion. Segment profit grew 46.8 percent to $445 million year to year.
Bell, the company’s helicopter segment, reported yearly revenue of $3.2 billion, a 4.1 percent dip from 2017. Segment profit increased 2.4 percent in 2018 to $425 million.
Textron Systems revenue fell 20.4 percent to $1.5 billion, although segment profit increased 12.2 percent to $156 million.
The company’s Industrial segment reported revenue of $4.3 billion, slightly more than in 2017. Segment profit for the year declined 24.8 percent to $218 million.
The company recorded net income of $246 million for the fourth quarter, or $1.02 per diluted share, compared with a $106 million net loss in the fourth quarter of 2017, or a loss of 40 cents per diluted share.
Revenue for the quarter fell 6.6 percent to $3.8 billion year over year.
Chris Bergenheim is the PBN web editor. Email him at Bergenheim@PBN.com.
