Textron (NYSE:TXT) Q4 2025 Earnings call January 28, 2026 08:00 AM ET Company ParticipantsDavid Rosenberg - CFOGavin Parsons - Director of Equity ResearchJohn Godyn - Managing DirectorKristine Liwag - Managing DirectorLisa Atherton - CEOMyles Walton - Managing DirectorNoah Poponak - Managing Director of Equity ResearchPeter Arment - Managing DirectorRobert Stallard - PartnerScott Donnelly - Executive ChairmanScott Hegstrom - VP of Investor Relations and TreasurerSeth Seifman - Exevutive DirectorSheila Kahya ...

Textron (NYSE:TXT) Q4 2025 Earnings call January 28, 2026 08:00 AM ET Company ParticipantsDavid Rosenberg - CFOGavin Parsons - Director of Equity ResearchJohn Godyn - Managing DirectorKristine Liwag - Managing DirectorLisa Atherton - CEOMyles Walton - Managing DirectorNoah Poponak - Managing Director of Equity ResearchPeter Arment - Managing DirectorRobert Stallard - PartnerScott Donnelly - Executive ChairmanScott Hegstrom - VP of Investor Relations and TreasurerSeth Seifman - Exevutive DirectorSheila Kahya ...

Textron (NYSE:TXT) Q4 2025 Earnings call January 28, 2026 08:00 AM ET Speaker7Thank you for standing by, and welcome to the Textron fourth quarter 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank yo ...

Financial Data and Key Metrics Changes - Revenues for the quarter were $3.6 billion, an increase of 5% or $175 million from the same quarter last year [2] - Segment profit was $357 million, up 26% or $73 million from the third quarter of 2024 [2] - Adjusted income from continuing operations was $1.55 per share, compared to $1.40 per share in the previous year [2] - Manufacturing cash flow before pension contributions totaled $281 million, compared to $147 million in the same quarter last year [3] Business Line Data and Key Metrics Changes - Textron Aviation revenues were $1.5 billion, up 10% or $138 million from the third quarter of 2024, with segment profit at $179 million, up 40% or $51 million [11] - Bell revenues were $1 billion, up 10% or $97 million, driven by higher military revenues, while segment profit was $92 million, down $6 million [12] - Textron Systems revenues were $307 million, up 2% or $6 million, with segment profit of $52 million, up $13 million [13] - Industrial revenues were $761 million, down $79 million, primarily due to the divestiture of the power sports business [14] - Finance segment revenues were $26 million, with a profit of $18 million, compared to $12 million and $5 million in the previous year [15] Market Data and Key Metrics Changes - Textron Aviation's backlog ended the quarter at $7.7 billion, reflecting strong demand [6] - Bell's backlog increased to $8.2 billion, up $1.3 billion from the prior quarter [12] - Textron Systems backlog ended at $3.2 billion, an increase of $980 million from the previous quarter [14] Company Strategy and Development Direction - The company announced the election of Lisa Atherton as the new President and CEO, effective January, with Scott Donnelly transitioning to Executive Chair [4] - Textron plans to eliminate the Textron Aviation segment as a separate reporting segment, realigning aviation business activities across Textron Aviation and Textron Systems [10] - The company continues to focus on strong growth in aerospace and defense businesses, with significant developments in the MV-75 program and Textron Aviation's product portfolio [5][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand across the aviation sector, with expectations for continued growth in aftermarket revenues [5][21] - The company anticipates a full-year adjusted EPS in the range of $6 to $6.20 and manufacturing cash flow before pension contributions between $900 million to $1 billion [16] - Management noted improvements in supply chain issues, although some critical suppliers still pose challenges [48] Other Important Information - The company repurchased approximately 2.6 million shares, returning $206 million in cash to shareholders during the quarter [16] - The adjusted effective tax rate for the third quarter was 25.5%, with an expectation of approximately 21% for the full year [15] Q&A Session Summary Question: Update on the MV-75 program and cost profile - Management indicated that the acceleration of the MV-75 program will not change the near-term cost profile, focusing on basic aircraft parameters [18][19] Question: Highlights on aviation demand - Management noted strong retail demand across the entire aviation portfolio, with improving margins and significant certification activity [20][21] Question: Long-term margin targets for aviation - Management stated that volume is the biggest lever for margin improvement, with steady bookings and plans for increased production in 2026 [32][33] Question: Supply chain impact on revenue forecast - Management acknowledged ongoing supply chain issues but expressed confidence in achieving the $6.1 billion revenue target [48][50] Question: Unmanned portfolio performance - Management reported strong performance in the Aerosonde program and ongoing development of new unmanned platforms, indicating growth opportunities [64][66] Question: Portfolio reevaluation post-management change - Management confirmed that the company continuously evaluates its portfolio for potential acquisitions or divestitures, independent of leadership changes [72]

Financial Data and Key Metrics Changes - Revenues for the quarter were $3.6 billion, an increase of 5% or $175 million from the same quarter last year [2] - Segment profit was $357 million, up 26% or $73 million from the third quarter of 2024 [2] - Adjusted income from continuing operations was $1.55 per share, compared to $1.40 per share in the previous year [2] - Manufacturing cash flow before pension contributions totaled $281 million, compared to $147 million in the same quarter last year [3] Business Line Data and Key Metrics Changes - Textron Aviation revenues were $1.5 billion, up 10% or $138 million from the third quarter of 2024, driven by higher aircraft revenues and aftermarket parts [10] - Bell revenues were $1 billion, up 10% or $97 million from the previous year, primarily due to higher military revenues [11] - Textron Systems revenues were $307 million, up 2% or $6 million from last year, with an increase in backlog of about $1 billion [12] - Industrial revenues were $761 million, down $79 million from last year, mainly due to the divestiture of the power sports business [12] - Textron eAviation segment revenues were $5 million, down from $6 million in the previous year [12] Market Data and Key Metrics Changes - Textron Aviation's backlog ended the quarter at $7.7 billion, reflecting strong demand [6] - Bell's backlog increased to $8.2 billion, up $1.3 billion from the prior quarter [11] - Textron Systems backlog ended at $3.2 billion, an increase of $980 million from the previous quarter [12] Company Strategy and Development Direction - The company announced the appointment of Lisa Atherton as the new President and CEO, effective January [4] - Textron Aviation is focusing on strong growth in aerospace and defense businesses, with significant certification activities and new product launches [5][7] - The company plans to eliminate the Textron Aviation segment as a separate reporting segment, realigning aviation business activities across Textron Aviation and Textron Systems [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand across the aviation sector, with improving margins and a robust product portfolio [19][20] - The company reiterated its full-year adjusted EPS guidance in the range of $6 to $6.20 and manufacturing cash flow expectations of $900 million to $1 billion [14] - Management acknowledged ongoing supply chain issues but noted improvements and a positive outlook for achieving revenue targets [46][48] Other Important Information - The company repurchased approximately 2.6 million shares, returning $206 million in cash to shareholders during the quarter [14] - The adjusted effective tax rate for the third quarter was 25.5%, with an expectation of approximately 21% for the full year [13] Q&A Session Summary Question: Update on MV-75 program and cost profile - Management indicated that the acceleration of the MV-75 program will not change the near-term cost profile, focusing on basic aircraft parameters [16][17] Question: Highlights on aviation demand - Management noted strong retail demand across the entire aviation portfolio, with improving margins and significant certification activities [18][19] Question: Update on MV-75 program and contract signing - Management clarified that the MV-75 program is primarily cost-plus development, with low risk in bringing forward LRIP units [24][25] Question: Long-term margin targets for aviation - Management stated that volume is the biggest lever for improving margins, with steady bookings and strong demand [30][31] Question: Supply chain impact on revenue forecast - Management acknowledged ongoing supply chain issues but expressed confidence in achieving the $6.1 billion revenue target [46][48] Question: Unmanned portfolio performance - Management reported strong performance in the unmanned systems segment, with growth expected from new developments [62][63] Question: Portfolio reevaluation post-management change - Management confirmed ongoing evaluation of the portfolio, with no immediate plans for significant changes [70]

Financial Data and Key Metrics Changes - Revenues for the quarter were $3.6 billion, up 5% or $175 million from the third quarter of 2024 [2] - Segment profit was $357 million, up 26% or $73 million from the third quarter of 2024 [2] - Adjusted income from continuing operations was $1.55 per share, compared to $1.40 per share in the same quarter last year [2] - Manufacturing cash flow before pension contributions totaled $281 million, compared to $147 million in the previous year [3] Business Line Data and Key Metrics Changes - Textron Aviation revenues were $1.5 billion, up 10% or $138 million from the third quarter of 2024, with segment profit at $179 million, up 40% or $51 million [11] - Bell revenues were $1 billion, up 10% or $97 million, driven by higher military revenues, while segment profit was $92 million, down $6 million [12] - Textron Systems revenues were $307 million, up 2% or $6 million, with segment profit of $52 million, up $13 million [12] - Industrial revenues were $761 million, down $79 million, primarily due to the divestiture of the power sports business [13] Market Data and Key Metrics Changes - Textron Aviation's backlog ended the quarter at $7.7 billion, reflecting strong demand [5] - Bell's backlog increased to $8.2 billion, up $1.3 billion from the prior quarter [12] - Textron Systems backlog ended at $3.2 billion, an increase of $980 million from the previous quarter [13] Company Strategy and Development Direction - The company announced the elimination of the Textron Aviation segment as a separate reporting segment, realigning aviation business activities across Textron Aviation and Textron Systems [10] - The appointment of Lisa Atherton as the new President and CEO indicates a focus on internal leadership development [4] - The company continues to explore portfolio optimization opportunities, including potential acquisitions or divestitures [52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand across the aviation sector, with expectations for continued growth in aftermarket revenues [19] - The company anticipates a full-year adjusted EPS in the range of $6 to $6.20 and manufacturing cash flow before pension contributions between $900 million to $1 billion [16] - Management noted improvements in supply chain issues, although some critical suppliers still pose challenges [38] Other Important Information - The company repurchased approximately 2.6 million shares, returning $206 million in cash to shareholders during the quarter [16] - The adjusted effective tax rate for the third quarter was 25.5%, with an expected full-year rate of approximately 21% [15] Q&A Session Summary Question: Impact of Army's announcement on MV-75 program - Management indicated that the announcement would not change the near-term cost profile, focusing on the basic aircraft's critical parameters [18] Question: Highlights on aviation demand - Management noted strong retail demand across the entire portfolio, with improving margins and significant certification activity [19] Question: Update on MV-75 program and contract signing - Management clarified that the program is primarily cost-plus development, with low risk in bringing forward LRIP units [22][24] Question: Long-term margin targets for aviation - Management stated that volume is the biggest lever for improving margins, with steady bookings despite market uncertainties [27][29] Question: Supply chain issues and revenue forecast - Management acknowledged ongoing supply chain challenges but expressed confidence in achieving the $6.1 billion revenue target [38] Question: Unmanned portfolio performance - Management reported strong performance in the Aerosonde program and ongoing development of new unmanned platforms [46][48] Question: Portfolio reevaluation post-management change - Management confirmed that the company continuously evaluates its portfolio for potential acquisitions or divestitures [52]