Textron Announces 16% EPS Increase Eight Years of Quarterly, Year-to-Year Income Growth

October 14, 1997
Providence, Rhode Island - October 14, 1997 - Reporting double-digit increases in earnings per share and net income, Textron Inc. today announced record third-quarter financial results, marking the company's 32nd consecutive quarter of year-to-year income growth.

Third-quarter earnings per share from continuing operations rose 16% to $0.81 per share. Income from continuing operations increased 15% over year-ago levels to $138 million, and revenues grew 12% to $2.5 billion.

"For eight years, Textron has posted quarterly, year-to-year income gains," said Textron Chairman and Chief Executive Officer James F. Hardymon. "This is attributed to the strength of our core, market-leading businesses and the dedication of our people, who are executing our strategies for growth."

Textron's Aircraft segment helped drive the company's strong third-quarter performance, with double-digit increases in revenues and income. "Innovative new products such as Cessna's Citation X and Bravo are generating very strong sales," said Hardymon. "We continue to focus on the development of new products and technologies as a major source of organic growth for Textron."

"The Automotive, Industrial, and Finance segments also contributed to Textron's third-quarter income growth, primarily reflecting the benefits realized from international acquisitions," explained Hardymon.

For the first nine months of 1997, Textron's earnings per share from continuing operations rose 17% to $2.39 from $2.05 the year before. Income from continuing operations was $408 million, up 15% from $354 million in the first nine months of 1996. Revenues were $7.7 billion, up 13% from $6.8 billion a year ago.

"Textron's multi-industry strategy continues to benefit shareholders, enabling the company to deliver consistent results in a variety of economic environments," said Hardymon. "We're proud of our strong track record, and are well positioned to maintain our momentum."

Textron Inc. (NYSE: TXT) is a $9.3 billion, global, multi-industry company with market-leading businesses in Aircraft, Automotive, Industrial and Finance.

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TEXTRON SEGMENT ANALYSIS

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Aircraft

The Aircraft segment's revenues and income for the third quarter increased 18% and 22%, respectively.

Cessna Aircraft led the increase due to higher sales of business jets, including the Citation X and Citation Bravo. Backlog increased to $2.7 billion from $1.6 billion at year-end 1996.

Bell Helicopter had another solid quarter, as higher U.S. Government aircraft sales and commercial spares sales offset lower revenues on the V-22 program and foreign military programs. Backlog remained strong at $2.0 billion.

Automotive

Revenues increased 31%, reflecting the first quarter 1997 acquisition of Kautex. Income increased 4%, reflecting the increased revenues, offset by the impact of new model launches and a restructuring effort which began in the second quarter of 1997.

Industrial

Revenues and income increased 5% and 12%, respectively. The increases were principally due to the acquisitions of Bunton, Maag Pump Systems, Maag Italia S.p.A. and Burkland. In addition, results benefited from improved performance in the fastening systems and contractor tool business.

Systems and Components

Revenues and income decreased 14% and 11%, respectively, reflecting the third quarter 1996 divestiture of Textron Aerostructures and lower revenues in Marine and Land Systems' products, partially offset by higher revenues on the sensor fuzed weapon contract and an increase in demand for aerospace components. Operating margins reached 11.3% during the quarter, up from 10.9% a year ago.

Finance

Revenues and income both increased 6%. Avco Financial Services' results benefited from the gain on the sale of certain underperforming branches, a higher level of finance receivables outstanding, including the benefit of three commercial finance acquisitions made in the first half of 1997, a decrease in the average cost of funds, and an improvement in underwriting results in its insurance operations. These benefits were offset by a decrease in the yields on finance receivables, a decrease in capital gains, and increased costs associated with international expansion. Total charge-offs as a percentage of average receivables were unchanged from year-ago levels. The results for Textron's commercial finance division -- Textron Financial Corporation -- increased primarily due to the gain on the securitization of $400 million of Textron-related receivables and a higher level of finance receivables.

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RECENT COMPANY HIGHLIGHTS

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Aircraft

  • Cessna Aircraft began production of the 206H Stationair and T206H Turbo Stationair models, further strengthening its single engine product lineup.

     

  • Cessna Aircraft introduced the Caravan 675, which will replace the existing Caravan. The new 675 model boosts the plane's power with a 675 horsepower engine.

     

  • Cessna Aircraft expanded its global sales network by adding authorized sales representatives in Colombia, the Czech and Slovak Republics, Poland and India.

     

  • Cessna Aircraft signed a contract with Embry-Riddle Aeronautical University for 300 single engine aircraft to be supplied over a 12-year period.

     

  • The Taiwanese government awarded Bell Helicopter a $40 million contract for 30 TH-67 Creek training helicopters.

     

  • The second of four Bell Boeing V-22 Osprey tiltrotor aircraft built to production standards was delivered in September to the Patuxent River Naval Air Warfare Test Center, Maryland.

Automotive

  • UK-based General Rubber Goods (GRG), a division of Pirelli Tyres Limited was acquired in September, further strengthening Textron Automotive's McCord Winn division. The division is now a leader in both the North American and European automotive seat comfort markets. With 1996 revenues of $19 million, GRG makes seat comfort systems for key automakers such as BMW, Rover and Jaguar.

     

  • Kaywood Products Corporation, a $4 million-in-revenues maker of precision machined parts and components for assembled automotive camshafts, was acquired in July. The Michigan-based company was added to Textron Automotive's CWC division. This acquisition adds a new technology to CWC's product mix of assembled camshafts used in compact multi-valve engines.

     

  • McCord Winn Textron introduced the revolutionary ASCTec, the first seat comfort system that automatically adjusts to provide a "custom-fit" for the occupant. The ASCTec uses a microprocessor and a series of sensor-equipped air cushions that continually respond to the occupant's position. The ASCTec made its world debut in the Cadillac Seville STS.

     

  • Textron Automotive Trim Operations won new business from Toyota, supplying interior trim components for the Camry, Avalon and a new Toyota truck, the T-100.

     

  • Textron Automotive's trim facility in Columbia, MO was awarded the prestigious Q-1 Award from the Ford Motor Company. The Columbia facility manufactures instrument panels and other interior trim for the Ford Contour and Mercury Mystique.

Industrial

  • Textron Fastening Systems has formed a new division, Textron Logistics Company (TLC), offering management, warehousing, engineering, manufacturing and distribution of industrial components. Manufacturers such as Lucent Technologies, Homelite, Polan and Delco Remy are already using TLC's value-added services.

Systems & Components

  • Textron Systems' facilities in Wilmington, MA and Farmington, NH achieved ISO 9001 and ISO 9001/QS 9000 certification. The Wilmington plant develops and manufactures smart munitions and landing systems. The Farmington plant produces Metalastic and Flexible Bright, used in automotive trim and other commercial applications.

     

  • HR Textron was awarded a $25 million contract from the Rocketdyne Division of Boeing to provide maintenance support for the Space Shuttle program through the year 2001.

Finance

  • Avco Financial Services continued its global expansion by opening its first consumer finance office in India. The office is based in New Delhi.


Connect with Textron IR

Eric Salander, Vice President, Investor Relations
(401) 457-2288
Cameron Vollmuth, Manager,
Investor Relations (401) 457-2288

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