News Release

• $468 million returned to shareholders through share repurchases
• Completed sale of Tools & Test product line
• Full-year adjusted EPS guidance narrowed to $3.20 - $3.30 per share
• Full-year cash flow guidance reaffirmed at $750 - $850 million

PROVIDENCE, R.I.--(BUSINESS WIRE)-- Textron Inc. (NYSE: TXT) today reported third quarter 2018 income from continuing operations of $2.26 per share, reflecting the gain on the sale of the Tools & Test product line of $1.65 per share, or $0.61 per share of adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release. This compares to $0.65 per share of adjusted income from continuing operations in the third quarter of 2017.

“Revenues were lower in the quarter, largely reflecting declines at Industrial and Textron Systems,” said Textron Chairman and CEO Scott C. Donnelly. “Operationally, we achieved margin improvements at Aviation and Bell, reflecting strong execution within those segments.”

Cash Flow

Net cash provided by operating activities of continuing operations of the manufacturing group for the third quarter totaled $319 million, compared to $79 million in last year’s third quarter. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, totaled $259 million compared to $281 million during last year’s third quarter.

In the quarter, Textron returned $468 million to shareholders through share repurchases, compared to $122 million in the third quarter of 2017.

Outlook

Textron now expects full-year 2018 GAAP earnings per share from continuing operations will be in the range of $4.81 to $4.91, or $3.20 to $3.30 on an adjusted basis (non-GAAP), which is reconciled to GAAP in an attachment to this release.

The company reaffirms full-year manufacturing cash flow before pension contributions (a non-GAAP measure) to be in a range of $750 to $850 million.

Third Quarter Segment Results

Textron Aviation

Revenues at Textron Aviation of $1.1 billion were down 2%, due to lower volume and mix reflecting lower turboprop volume, partially offset by favorable pricing.

Textron Aviation delivered 41 jets, flat with last year, and 43 commercial turboprops, down from 57 last year.

Segment profit was $99 million in the third quarter, up from $93 million a year ago, due to favorable price and performance, partially offset by the impact of lower volume and mix.

Textron Aviation backlog at the end of the third quarter was $1.8 billion.

Bell

Bell revenues were $770 million, down 5% primarily on commercial mix, partially offset by higher military revenues.

Bell delivered 43 commercial helicopters in the quarter, up from 39 last year.

Segment profit of $113 million was up $7 million, largely the result of favorable performance on military programs, partially offset by commercial mix.

Bell backlog at the end of the third quarter was $5.7 billion.

Textron Systems

Revenues at Textron Systems were $352 million, down from $458 million last year, reflecting lower TAPV deliveries at Textron Marine & Land Systems and lower volume in the Simulation, Training & Other product line.

Segment profit was down $11 million, primarily reflecting the lower net volume.

Textron Systems’ backlog at the end of the third quarter was $1.1 billion.

Industrial

Industrial revenues decreased $112 million largely related to the disposition of our Tools & Test product line.

Segment profit was down $48 million from the third quarter of 2017, largely due to unfavorable pricing and performance, and the impact from the disposition of our Tools & Test product line.

Finance

Finance segment revenues were down $3 million, and profit was down $4 million from last year’s third quarter.

Conference Call Information

Textron will host its conference call today, October 18, 2018 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) 230-1951 in the U.S. or (612) 288-0340 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, October 18, 2018 by dialing (320) 365-3844; Access Code: 431862.

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, Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, Textron Off Road, Arctic Cat, Textron Systems, and TRU Simulation + Training. For more information visit: www.textron.com.

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 in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under “Risk Factors”, among the factors that could cause actual results to differ materially from past and projected future results are the following: Interruptions in the U.S. Government’s ability to fund its activities and/or pay its obligations; changing priorities or reductions in the U.S. Government defense budget, including those related to military operations in foreign countries; 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; volatility in the global economy or changes in worldwide political conditions that adversely impact demand for our products; volatility in interest rates or foreign exchange rates; risks related to our international business, including establishing and maintaining facilities in locations around the world and relying on joint venture partners, subcontractors, suppliers, representatives, consultants and other business partners in connection with international business, including in emerging market countries; our Finance segment’s ability to maintain portfolio credit quality or to realize full value of receivables; performance issues with key suppliers or subcontractors; legislative or regulatory actions, both domestic and foreign, 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; pension plan assumptions and future contributions; demand softness or volatility in the markets in which we do business; cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or, operational disruption; difficulty or unanticipated expenses in connection with integrating acquired businesses; the risk that acquisitions do not perform as planned, including, for example, the risk that acquired businesses will not achieve revenue and profit projections; and the impact of changes in tax legislation (including the recently enacted Tax Cuts and Jobs Act).

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Textron Inc.
Investor Contacts:
Eric Salander, 401-457-2288
or
Jeffrey Trivella, 401-457-2288
or
Media Contact:
David Sylvestre, 401-457-2362

Source: Textron