Textron reports $307M profit in 2017

TEXTRON REPORTED 2017 INCOME of $307 million. Above, the 407GXP from Bell Helicopter. / COURTESY BELL HELICOPTER
TEXTRON REPORTED 2017 INCOME of $307 million. Above, the 407GXP from Bell Helicopter. / COURTESY BELL HELICOPTER

PROVIDENCE – Textron Inc. reported a $307 million 2017 year-end net income, a 68 percent decline from its $962 million profit in 2016, however, much of the decline came from a one-time $266 million tax expense resulting from the Tax Cuts and Jobs Act.

The company received a $319 million tax benefit from a tax settlement with the Internal Revenue Service in 2016, inflating the yearly profit decline.

Revenue for the year totaled $14.2 billion, a 3 percent increase year over year from $13.8 billion in 2016.

The company also reported year-end restructuring expenses of $90 million. Textron announced earlier in January that it had expanded its restructuring plans for the fourth quarter, which expected to mostly take place in the company’s Bell, Textron Systems and Industrial segments. The company’s restructuring costs were $123 million one year prior.

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The company also reported a $106 million net income loss for the fourth quarter that included the aforementioned $266 million tax expense. However, the company said it expects to benefit from the tax act with an effective tax rate of 22.5 percent.

Segments:

Textron’s Bell segment saw a profit increase year over year, rising 7.5 percent from $386 million to $415 million. It was the only segment that experienced an increase in yearly profit. Bell revenue increased year over year from $3.2 billion in 2016 to $3.3 billion in 2017.

The Bell segment reported a $114 million profit for the quarter, a $12 million decline year over year due to a “change in commercial mix.” However, the segment’s revenue increased 11 percent to $983 million for the fourth quarter due to higher military volumes.

The company’s Textron Aviation segment reported a $303 million profit for 2017, a 22.1 percent decline from 2016’s $389 million profit.

Aviation’s quarterly profit declined $15 million year over year to $120 million in the fourth quarter due to higher research and development expense.

The company’s Industrial segment profit declined 11.9 percent from $329 million in 2016 to $290 million in 2017.

For the fourth quarter, Industrial profit increased $10 million year over year to $83 million.

Textron Systems segment profit was $139 million for 2017, a 25.3 percent decline year over year from 2016’s $186 million.

In the fourth quarter, Systems revenue declined $43 million year over year to $489 million due to “lower volume at Weapons and Sensors.”

Despite the decline in profit, Textron Chairman and CEO Scott C. Donnelly remained optimistic, saying in a statement, “We delivered strong cash performance throughout the year and returned $603 million to shareholders through share repurchases and dividends.”

He added, “In 2018, we expect these investments to drive increasing organic sales along with the margin expansion and strong cash generation.”

Chris Bergenheim is the PBN web editor.

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