Textron Q3 Profit Up 61%, Beats View; Lifts 2014 Earnings Outlook

(RTTNews) - Textron Inc. (TXT) on Friday reported a 61 percent surge in profit for the third quarter from last year, reflecting the impact of the acquisition of Beechcraft Corp. and higher aircraft deliveries.

Earnings per share for the quarter beat analysts' expectations, while revenues missed their estimates. Looking ahead, the aerospace and defense company raised its earnings outlook for fiscal 2014.

Scott Donnelly, CEO of Textron said, "Revenues at Textron Aviation, Industrial and Bell were up during the quarter, primarily reflecting the success of our new product investment and acquisition strategies. Operationally, we achieved significant margin improvement in the quarter at Textron Aviation, reflecting higher volumes and better performance. Bell also had improved performance, leading to an increase in quarterly margins compared to last year."

Textron's net income for the third quarter was $159 million or $0.57 per share, up from $99 million or $0.35 per share in the prior-year period.

The producer of Cessna aircraft and Bell helicopters noted that the latest quarter's results included restructuring costs of $0.01 per recorded as part of acquisition and restructuring costs, while the Textron Aviation segment profit reflected a negative impact of $0.02 per share from fair value step-up adjustments to Beechcraft inventories sold during the quarter.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 18 percent to $3.43 billion from $2.90 billion in the prior-year period. Analysts had a consensus revenue estimate of $3.63 billion for the quarter.

Revenues at Textron Aviation grew 82 percent from the year-ago period to $1.08 billion, reflecting the impact of the Beechcraft acquisition and higher jet deliveries. Textron Aviation delivered 33 new jets in the quarter, up from 25 jets in the year-ago period, and 30 King Air turboprops.

Bell revenues for the quarter increased almost 2 percent to $1.18 billion, primarily the result of higher V-22 program volume, partially offset by lower H-1 and commercial deliveries.

Industrial revenues increased 10 percent to $785 million, reflecting the impact of acquisitions and higher overall volumes.

Meanwhile, revenues at Textron Systems declined 12 percent from last year to $358 million, reflecting lower Marine and Land Systems volumes, partially offset by the impact of acquisitions. Finance segment revenues decreased 24 percent to $25 million, primarily due to gains on finance receivable dispositions during the prior-year period.

Looking ahead to fiscal 2014, Textron raised its outlook for earnings from continuing operations to a range of $2.05 to $2.15 per share from the prior range of $1.92 to $2.12 per share. Analysts expect the company to report full-year earnings per share of $2.07.

Textron now forecasts cash flow from continuing operations of the manufacturing group before pension contributions in a range of $700 million to $800 million, with expected pension contributions of about $83 million.

Earlier, the company forecast full-year cash flow from continuing operations of the manufacturing group before pension contributions of $600 million to $700 million, with expected pension contributions of about $90 million.

TXT closed Thursday's trading at $33.66. In Friday's pre-market activity, the stock is up $3.09 or 8.89 percent to $36.75.