Textron(US:TXT)2022-10-27 17:50Financial Data and Key Metrics Changes - Revenues for Q3 2022 were $3.1 billion, an increase of $88 million from Q3 2021 [5] - Segment profit for the quarter was $299 million, up $20 million from the previous year [5] - Income from continuing operations was $1.06 per share, compared to $0.85 per share on an adjusted basis in Q3 2021 [5] - Manufacturing cash flow before pension contributions totaled $292 million, an increase of $21 million from Q3 2021 [6][14] Business Line Data and Key Metrics Changes - Textron Aviation revenues were $1.2 billion, down $14 million from Q3 2021, with segment profit at $139 million, up $41 million [11] - Bell revenues were $754 million, down $15 million, with segment profit of $85 million, down $20 million [12] - Textron Systems revenues were $292 million, down $7 million, with segment profit of $37 million, down $8 million [12] - Industrial revenues increased to $849 million, up $119 million, with segment profit of $39 million, up $16 million [12][13] - Textron eAviation segment revenues were $5 million, with a segment loss of $8 million [13] Market Data and Key Metrics Changes - Aviation segment profit margins improved to 11.9%, up from 8.3% in Q3 2021, despite lower revenues [7] - Backlog for Textron Aviation ended at $6.4 billion, while Bell's backlog was $4.9 billion, and Textron Systems' backlog was $2 billion [11][12] Company Strategy and Development Direction - The company announced a focus on sustainable aircraft development, including the Nexus eVTOL model [10] - Continued investment in research and development to support long-term strategies in urban air mobility and general aviation [10] - The company is managing supply chain challenges while maintaining strong demand across its product lines [7][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain disruptions impacting production schedules but noted strong demand in the market [7][18] - The company expects Aviation revenues to be approximately $300 million below original guidance for the year, but margins remain strong [20] - Management expressed confidence in the backlog and demand environment, anticipating a return to higher delivery levels in 2023 [36][38] Other Important Information - The company repurchased approximately 3.1 million shares, returning $200 million in cash to shareholders [15] - Full-year capital expenditures are expected to be about $375 million, with a tax rate around 16% [15] Q&A Session Summary Question: Revenue expectations for Aviation and Systems - Management confirmed that supply chain challenges have pushed some deliveries to the right, impacting revenue expectations [18] Question: Corporate expenses run rate - Management indicated a run rate of about $110 million for corporate expenses for the year [22] Question: Manufacturing footprint in Europe and FX impact - Management noted that FX impacts have primarily affected the Kautex business, with no significant energy-related issues impacting production [24] Question: FLRAA contract timing and spending - Management expects a decision on the Florida contract in November and is committed to supporting the program [27] Question: Bell's performance without FLRAA - Management remains optimistic about Bell's performance, regardless of FLRAA outcomes, citing strong commercial demand [30] Question: Aviation delivery expectations for 2022 and 2023 - Management indicated that while 2022 deliveries will be lower than expected, they anticipate a ramp-up in 2023 [32] Question: Cash flow expectations for 2023 - Management expects strong cash flow management to continue, with no significant headwinds anticipated [39] Question: Supply chain issues and engine shortages - Management confirmed that engine shortages remain a challenge, but they are managing through various supply chain issues [55] Question: Aftermarket performance - Aftermarket revenues were up 18% year-over-year, indicating strong demand [57] Question: Cash deployment strategy - Management plans to continue share repurchases, having already repurchased $640 million year-to-date [63]