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Textron(TXT) - 2024 Q1 - Earnings Call Transcript
TXTTextron(TXT)2024-04-25 14:18
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Financial Data and Key Metrics Changes - Revenue for Q1 2024 was 3.1billion,anincreasefrom3.1 billion, an increase from 3 billion in Q1 2023 [6] - Segment profit for the quarter was 290million,up290 million, up 31 million from the previous year [6] - Adjusted income from continuing operations was 1.20pershare,comparedto1.20 per share, compared to 1.05 per share in Q1 2023 [6] - Manufacturing cash flow before pension contributions showed a cash use of 81million,comparedtocashprovidedof81 million, compared to cash provided of 104 million in Q1 2023 [6] Business Line Data and Key Metrics Changes - Aviation: Revenues were 1.2billion,up1.2 billion, up 39 million from Q1 2023, with segment profit at 143million,anincreaseof143 million, an increase of 18 million [12] - Bell: Revenues increased to 727million,up727 million, up 106 million from last year, with segment profit at 80million,up80 million, up 20 million [13] - Textron Systems: Revenues were flat at 306million,withsegmentprofitup306 million, with segment profit up 4 million to 38million[14]−∗∗Industrial∗∗:Revenuesdecreasedto38 million [14] - **Industrial**: Revenues decreased to 892 million, down 40millionfromlastyear,withsegmentprofitdown40 million from last year, with segment profit down 12 million to 29million[14]MarketDataandKeyMetricsChanges−TextronAviation′sbacklogendedthequarterat29 million [14] Market Data and Key Metrics Changes - Textron Aviation's backlog ended the quarter at 7.3 billion, reflecting strong demand [7][12] - Bell's backlog was 4.5billion,drivenbymilitaryvolumerelatedtotheFLRAAprogram[13]−TextronSystems′backlogendedat4.5 billion, driven by military volume related to the FLRAA program [13] - Textron Systems' backlog ended at 1.8 billion [14] Company Strategy and Development Direction - The company is focusing on improving supply chain efficiencies and production capabilities to support delivery growth [8] - Textron is expanding its restructuring plan to address cost structures in light of program cancellations, with expected savings of approximately 185million[16][81]−ThecompanyisoptimisticaboutthefutureoftheFLRAAprogram,expectingtocompletemilestoneBandentertheengineeringandmanufacturingdevelopmentphase[8][50]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementnotedcontinuedimprovementsinsupplychainandfactoryproductivity,contributingtopositivedeliverytrends[19]−Thecompanyanticipatesaslightdeclineinindustrialrevenueduetosoftnessinhigh−endconsumerdemand,whilemaintainingapositiveoutlookforaviationandBellsegments[23][44]−Managementreiteratedfull−yearadjustedearningspershareguidanceof185 million [16][81] - The company is optimistic about the future of the FLRAA program, expecting to complete milestone B and enter the engineering and manufacturing development phase [8][50] Management's Comments on Operating Environment and Future Outlook - Management noted continued improvements in supply chain and factory productivity, contributing to positive delivery trends [19] - The company anticipates a slight decline in industrial revenue due to softness in high-end consumer demand, while maintaining a positive outlook for aviation and Bell segments [23][44] - Management reiterated full-year adjusted earnings per share guidance of 6.20 to 6.40[17]OtherImportantInformation−Thecompanyrepurchasedapproximately3.6millionshares,returning6.40 [17] Other Important Information - The company repurchased approximately 3.6 million shares, returning 317 million in cash to shareholders [16] - Special charges of 14 million were incurred under the restructuring plan, with additional severance costs expected in Q2 [16] Q&A Session Summary Question: Can you provide insights on deliveries in the quarter? - Management expects growth in deliveries year-over-year, with improvements in supply chain and productivity [18][19] Question: Is there softness in the industrial segment? - Management confirmed softness in high-end consumer demand, particularly in recreational and personal transportation sectors [22][23] Question: What are the expectations for Bell's margins? - Management anticipates margins to remain strong, supported by cost actions and new orders [26][28] Question: How is the supply chain performing in Aviation? - Management acknowledged ongoing challenges with specific components but noted overall improvements [74][75] Question: What is the outlook for the E-Aviation segment? - Management is optimistic about the Pipistrel business and the Nexus program, expecting growth in the coming years [62][63] Question: How will the restructuring impact cash flow? - Management expects restructuring savings to be around 185 million, with a cash impact of approximately 60millionto60 million to 65 million for 2024 [25][81]