PROVIDENCE, R.I.--(BUSINESS WIRE)--Jul. 19, 2012-- Textron Inc. (NYSE: TXT) today reported second quarter 2012 income from continuing operations of $0.58 per share, compared to income of $0.29 per share in the second quarter of 2011. Total revenues in the quarter were $3.0 billion, up 10.7% from the second quarter of 2011.

Manufacturing segment profit was $288 million, up $59 million from the second quarter of 2011. Manufacturing cash flow before pension contributions was $121 million during the second quarter compared to $171 million during last year’s second quarter. The company contributed $21 million to its pension plans during the second quarter.

“The payoff from investing in new products and services is reflected in our double digit revenue growth during the quarter and our focus on operational execution is driving solid results,” said Textron Chairman and CEO Scott C. Donnelly.

Donnelly continued, “We are also very pleased with recent significant program wins, including the Canadian Tactical Armored Patrol Vehicle, the U.S. Navy’s Ship-to–Shore Connector, upgrades to the U.S. Army’s Shadow TUAS, and an agreement with NetJets to provide up to 150 Citation Latitudes for their fleet, all of which help contribute to the positive outlook we have for our businesses.”

Outlook

Textron confirmed its 2012 earnings per share from continuing operations guidance of $1.80 to $2.00 and cash flow from continuing operations of the manufacturing group before pension contributions between $700 and $750 million, with planned pension contributions of about $200 million.

Second Quarter Segment Results

Cessna

Revenues at Cessna increased $111 million, reflecting the delivery of 49 new Citation jets in the quarter, compared with 38 in last year’s second quarter.

Segment profit of $35 million was an improvement of $30 million, primarily due to the higher volume.

Cessna backlog at the end of the second quarter was $1.5 billion, down $196 million from the first quarter of 2012.

Bell

Bell revenues increased $184 million in the second quarter from the same period in the prior year, primarily reflecting the delivery of 47 commercial helicopters compared to 22 units in last year’s second quarter. Bell also delivered 9 V-22 and 6 H-1 aircraft in the quarter compared to 9 V-22’s and 8 H-1’s in last year’s second quarter.

Segment profit increased $32 million, primarily reflecting higher volume and favorable mix in our commercial business.

Bell backlog at the end of the second quarter was $6.7 billion, down $394 million from the first quarter of 2012.

Textron Systems

Revenues at Textron Systems decreased $63 million primarily due to lower sensor fuzed weapon and armored security vehicle volumes. Segment profit decreased $9 million, reflecting the lower volumes and deliveries on lower-margin contracts.

Textron Systems’ backlog at the end of the second quarter was $2.7 billion, up $1.2 billion from the first quarter of 2012.

Industrial

Industrial revenues increased $37 million reflecting higher volumes across most of the businesses partially offset by unfavorable foreign exchange. Segment profit increased $6 million primarily due to the higher volume.

Finance

Finance segment revenues increased $22 million compared to the second quarter of 2011. The segment reported a profit of $22 million compared to a $33 million loss in last year’s second quarter.

Conference Call Information

Textron will host its conference call today, July 19, 2012 at 8:00 a.m. (Eastern) to discuss its results and outlook. The call will be available via webcast at www.textron.com or by direct dial at (800) 230-1059 in the U.S. or (612) 234-9959 outside of the U.S. (request the Textron Earnings Call).

In addition, the call will be recorded and available for playback beginning at 10:30 a.m. (Eastern) on Thursday, July 19, 2012 by dialing (320) 365-3844; Access Code: 225826.

A package containing key data that will be covered on today’s call can be found in the Investor Relations section of the company’s website at www.textron.com.

About Textron Inc.

Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell Helicopter, Cessna Aircraft Company, Jacobsen, Kautex, Lycoming, E-Z-GO, Greenlee, and Textron Systems. More information is available at www.textron.com.

Non-GAAP Measures

Manufacturing cash flow before pension contributions is a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release.

Forward-looking Information

Certain statements in this release and other oral and written statements made by us from time to time are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which may describe strategies, goals, outlook or other non-historical matters, or project revenues, income, returns or other financial measures, often include words such as “believe,” “expect,” “anticipate,” “intend", “plan,” “estimate,” “guidance”, “project”, “target”, “potential”, “will”, “should”, “could”, “likely” or “may” and similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. In addition to those factors described under “Risk Factors” in our Annual Report on Form 10-K, among the factors that could cause actual results to differ materially from past and projected future results are the following: changing priorities or reductions in the U.S. Government defense budget, including those related to military operations in foreign countries; changes in worldwide economic or political conditions that impact demand for our products, interest rates or foreign exchange rates; our ability to perform as anticipated and to control costs under contracts with the U.S. Government; the U.S. Government’s ability to unilaterally modify or terminate its contracts with us for the U.S. Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, or, under certain circumstances, to withhold payment or suspend or debar us as a contractor eligible to receive future contract awards; changes in foreign military funding priorities or budget constraints and determinations, or changes in government regulations or policies on the export and import of military and commercial products; our Finance segment’s ability to maintain portfolio credit quality or to realize full value of receivables and of assets acquired upon foreclosure of receivables; our ability to access the capital markets at reasonable rates; performance issues with key suppliers, subcontractors or business partners; legislative or regulatory actions impacting our operations or demand for our products; our ability to control costs and successfully implement various cost-reduction activities; the efficacy of research and development investments to develop new products or unanticipated expenses in connection with the launching of significant new products or programs; the timing of our new product launches or certifications of our new aircraft products; our ability to keep pace with our competitors in the introduction of new products and upgrades with features and technologies desired by our customers; the extent to which we are able to pass raw material price increases through to customers or offset such price increases by reducing other costs; increases in pension expenses or employee and retiree medical benefits; uncertainty in estimating reserves, including reserves established to address contingent liabilities, unrecognized tax benefits, or potential losses on our Finance segment’s receivables; difficult conditions in the financial markets which may adversely impact our customers’ ability to fund or finance purchases of our products; and volatility in the global economy resulting in demand softness or volatility in the markets in which we do business.

Free cash flow is a measure generally used by investors, analysts and management to gauge a company’s ability to generate cash from operations in excess of that necessary to be reinvested to sustain and grow the business and fund its obligations. Our definition of Manufacturing free cash flow adjusts net cash from operating activities of continuing operations for dividends received from TFC, capital contributions provided under the Support Agreement, capital expenditures, proceeds from the sale of property, plant and equipment and contributions to our pension plans. We believe that our calculation provides a relevant measure of liquidity and is a useful basis for assessing our ability to fund operations and obligations. This measure is not a financial measure under GAAP and should be used in conjunction with GAAP cash measures provided in our Consolidated Statement of Cash Flows.

Source: Textron Inc.

Textron Inc.
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