Providence, RI - April 21, 1998 - Textron Inc. today announced a 16 percent increase in first-quarter diluted earnings per share, marking the company's thirty-fourth consecutive quarter of year-to-year income growth.
First-quarter earnings per share rose to 85 cents per share from 73 cents the year before. Net income of $142 million was up 14 percent from $125 million in 1997. Revenues increased 7 percent to $2.7 billion from $2.6 billion last year.
"Our first-quarter performance was driven by solid results in each of our manufacturing segments," said Textron Chairman and Chief Executive Officer James F. Hardymon. "This is a great way to start our 75th anniversary year, and we are well positioned to continue our strong track record."
"Textron's consistent growth will continue to be driven by internal growth, balanced by strategic international and domestic acquisitions. Our commitment to balanced growth will be the key to delivering double-digit revenue increases in 1998," said Textron President and Chief Operating Officer Lewis B. Campbell.
In the last 14 months, Textron has bolstered its core businesses with 15 acquisitions, 12 outside the United States. "Our acquisitions are contributing to our financial results, while establishing platforms for future growth by expanding the company into new geographic markets and bringing new technologies," Campbell continued.
These acquisitions have been complemented by internal growth driven by increased sales of market-leading Textron products such as Cessna's Citation business jets and single-engine aircraft, Kautex's plastic fuel tanks and Textron Fastening Systems' engineered products and components.
In the first quarter, Textron announced a succession plan in which Campbell will assume the additional title of chief executive officer on July 1, 1998. Hardymon will remain chairman until his retirement in 1999.
Also, as a further demonstration of its commitment to build shareholder value, Textron announced in the first quarter a 14 percent increase in the quarterly dividend - the company's seventh consecutive annual double-digit dividend increase.
Textron Inc. (TXT:NYSE) is a $10.5 billion, global, multi-industry company with market-leading operations in Aircraft, Automotive, Industrial and Finance.
TEXTRON SEGMENT ANALYSIS
Segment revenues decreased 3%, while income rose 2%.
Cessna posted increases in revenues and income, reflecting higher sales of business jets -- specifically the Citation VII and X -- and higher sales of single engine aircraft. Deliveries of business jets increased 19% to 37 aircraft. Backlog increased to a record $3.1 billion from $2.8 billion at year-end 1997.
Bell Helicopter's revenues and income decreased due to lower commercial helicopter sales, reflecting the completion in 1997 of the three-year contract for model 412 helicopters with the Canadian Forces. This was partially offset by higher revenues on the Huey upgrade contract for the U.S. Marines. Backlog increased to $2.3 billion from $1.9 billion at the end of 1997.
Revenues increased 11% and income increased 12%. The increases were due to higher volume at Kautex associated with capacity expansion in North America, higher sales and improved performance in the Trim operations, and the third quarter 1997 acquisition of the General Rubber Goods division of Pirelli Tyres, Ltd.
Revenues and income increased 14% and 16%, respectively, reflecting the contribution from acquisitions and internal growth combined with ongoing margin improvement. The following acquisitions contributed to the growth in the quarter: Maag Pump Systems and Maag Italia S.p.A. (1/31/97), Burkland (7/1/97), Brazaco Mapri Industries (12/1/97) and Ransomes (1/26/98). Partially offsetting the benefit of these acquisitions was the divestiture of Speidel (12/31/97). Internal growth was driven by continued strength in fastening systems, aerospace components and the contractor tools businesses.
Segment revenues increased 4% while income decreased 2%. Revenues at Avco Financial Services increased due to the gain on the sale of certain underperforming branches and a higher level of international finance receivables outstanding. Income declined as a result of higher funding costs in Hong Kong and a decrease in U.S. finance receivables outstanding.
The increase in the results of Textron's commercial finance division - Textron Financial Corporation -- reflected the benefit of higher revenues due to higher yields and lower provisions for loan losses, partially offset by a lower level of average receivables.
RECENT COMPANY HIGHLIGHTS
- James F. Hardymon, chairman and CEO, announced on March 5th that the company's Board of Directors approved a management succession plan in which Lewis B. Campbell, president and chief operating officer, will become CEO effective July 1, 1998. Hardymon will remain chairman until his retirement at the end of 1999.
- Textron increased its regular quarterly dividend on the company's Common Stock 14% to twenty-eight and a half cents per share, marking the seventh consecutive year of double-digit dividend increases.
- Textron announced its intent to acquire a substantial portion of Boeing's commercial helicopter business, including the MD 500 and 600 series product lines, further strengthening Bell Helicopter's leadership position in the commercial helicopter market. Bell also became the full owner of the Bell/Boeing 609 civil tiltrotor, with Boeing staying on as a subcontractor through the aircraft's development phase.
- Textron Automotive Company (TAC) divisions received two Chrysler Pentastar Awards including a Gold Pentastar for excellent performance, and Ford's "Q1" Award. They also received a "Supplier of the Year" Award from Lear Seating Europe and GM's Certificate of Excellence for Extraordinary Quality Performance.
- The acquisition of Ransomes PLC was completed in January. The UK-based company is a leading maker of turf-care machinery and light utility vehicles. Brands include: Ransomes, Cushman, Ryan, Steiner and Brouwer.
- Textron acquired Germany-based Sükosim, a $53 million-in-sales maker of fastening systems and components for European automotive and construction industries.
- Textron Financial Corporation (TFC) acquired Systran, a financing business for the trucking industry with approximately $62 million in receivables. The acquisition complements TFC's revolving finance business.
- TFC opened the Franchise Finance Division (FFD), a new business unit offering financial products for new stores, equipment upgrades and image enhancements. Several franchise companies have designated FFD as a loan source for store owners, including: Dunkin' Donuts, Minuteman Press, Great Clips and Baskin Robbins.