By Aatreyee Dasgupta
July 28 (Reuters) – Textron beat second-quarter profit and revenue estimates on Tuesday, owing to higher aircraft pricing, but productivity issues at its aviation unit weighed on jet deliveries, sending its shares down more than 6% in morning trading.
The business jet maker’s larger aviation segment, which manufactures the Cessna jet and Beechcraft aircraft, delivered nine jets fewer than a year ago.
However, steady aftermarket services demand and higher aircraft pricing helped offset the impact, resulting in a 1% rise in quarterly segment revenue from a year earlier.
The segment has been facing productivity challenges tied to supply-chain bottlenecks and an inexperienced workforce, CEO Lisa Atherton said on a post-earnings call, adding that about half of its workforce has less than five years of experience.
“When you talk about those new employees that started coming in around 2022, we should start to see that yield next year, with productivity.”
The Bell segment, which makes helicopters and tiltrotor aircraft, posted a 6% rise in quarterly revenue, driven by growth in the MV-75 Future Long Range Assault Aircraft program and higher commercial helicopter, parts and services sales.
Revenue rose 7% at the Textron Systems segment and was up 1% at the industrial segment.
Textron’s total quarterly revenue rose 7% to $3.83 billion, compared with analysts’ average estimate of $3.8 billion, according to data compiled by LSEG.
The company’s quarterly adjusted profit stood at $1.62 per share, compared with estimates of $1.55.
Textron reiterated its full-year adjusted profit forecast of $6.40 to $6.60 per share, the midpoint of which stands 2 cents below estimates of $6.52.
Textron’s profit forecast assumes the receipt of additional Army funding for the MV-75 Cheyenne program, noting a 20-cent to 30-cent per share hit if the funding does not materialize.
The company is continuing work on the program on a self-funded basis while awaiting congressional approval of an Army request to reallocate funding, executives said during the call.
(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Shreya Biswas)
Comments