Textron's Record Performance Continues: EPS Up 17%

April 15, 1997

30 Consecutive Quarters of Income Improvement

Providence, RI - April 15, 1997 - Textron Inc. today again announced record financial results, including a 17 percent increase in first-quarter earnings per share. This marks the company's thirtieth consecutive quarter of year-to-year income growth.

First-quarter EPS from continuing operations rose to $1.47 per share from $1.26 the year before. Income from continuing operations of $125 million was up 15 percent from the 1996 amount of $109 million. Revenues increased 15 percent to $2.6 billion from $2.2 billion last year.

"Our strong first-quarter performance was driven by across-the-board gains in each of our four core business segments," said Textron Chairman and Chief Executive Officer James F. Hardymon. "Textron is off to a great start in 1997 and we're well positioned to continue our strong track record."

"This quarter's performance is a testament to our twin growth strategies -- growth by acquisition balanced by strong internal growth," Hardymon continued. Since the year-ago quarter, Textron has bolstered its core businesses with eight European acquisitions. "Our acquisitions are contributing to our financial results, while expanding the company into new geographic markets and establishing platforms for future growth," he said.

These acquisitions have been complemented by strong internal growth resulting from new products such as Cessna's Citation X (the world's fastest business jet) and the Bell 407 helicopter. "These new products are another example of Textron's commitment to market leadership as a way to build shareholder value," said Hardymon.

In a further demonstration of its commitment to build shareholder value, Textron announced in the first quarter a 14 percent increase in the quarterly dividend, and a two-for-one stock split, subject to approval at the Annual Shareholders' Meeting on April 23.

Textron Inc. (TXT:NYSE) is a $9.3 billion, global, multi-industry company with market-leading operations 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 first quarter increased 8% and 14%, respectively. Cessna Aircraft led the increase due to higher sales of business jets, including the recently introduced Citation X and Citation Bravo. Backlog increased to $1.7 billion from $1.6 billion at year-end 1996.

Bell Helicopter had another strong quarter, notwithstanding that revenues and income were slightly lower than last year. Higher commercial aircraft sales were offset by lower revenues on the V-22 program. Backlog of $2.2 billion remained unchanged from year-end 1996, as orders for commercial helicopters and new military contracts offset deliveries under the Canadian Forces contract and performance under the V-22 program.

Automotive

Revenues and income increased 38% and 35%, respectively. The improved results reflect the first quarter 1997 acquisition of Kautex, and the 1996 acquisitions of Valeo Wiper Systems and the remaining 50% of a joint venture in Born, Netherlands. Stronger light truck sales to U.S. OEMs also contributed to the segment's strong results.

Industrial

Revenues and income increased 30% and 24%, respectively. The increases were principally due to higher sales in the fastening systems business, including the second quarter 1996 acquisition of Textron Industries S.A.S. In addition, results benefited from the third quarter 1996 acquisition of Klauke and the first quarter 1997 acquisitions of Maag Pump Systems and Maag Italia SpA, and higher sales and improved performance at E-Z-GO.

Systems and Components

Revenues decreased 16%, while income was equal to last year. The decrease in revenues reflected the third quarter 1996 divestiture of Textron Aerostructures, partially offset by an increase in demand for aerospace components.

Finance

Revenues and income increased 3% and 4%, respectively. Avco Financial Services' results benefited from a higher level of finance receivables outstanding, a decrease in the average cost of borrowed funds, and a decrease in insurance losses. These factors were partially offset by an increase in the provision for loan losses resulting from a higher level of credit losses relative to the year-ago quarter. The results for Textron's commercial finance division -- Textron Financial Corporation -- increased primarily due to a higher level of finance receivables.

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RECENT COMPANY HIGHLIGHTS

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Corporate

  • Textron announced a two-for-one split of Textron common stock.

     

  • Textron increased the regular quarterly dividend 14% to fifty cents per share, marking the sixth year of double-digit dividend increases.

     

  • Textron completed the sale of Paul Revere to Provident Companies. Proceeds from the sale will be used to finance acquisitions, repurchase Textron common shares and reduce debt.

Aircraft

  • Cessna and the Citation X design team were named recipients of the prestigious Robert J. Collier Trophy. Regarded as the most distinguished award in aviation, the Collier Trophy is awarded annually for the country's greatest achievement in aeronautics and astronautics.

     

  • Cessna delivered the first Citation Bravo, the next generation of the Citation II.

     

  • Cessna officially reentered the single engine piston aircraft market with the first delivery of a 172 Skyhawk.

     

  • FLYING magazine Editors' Choice Flag was awarded to Cessna in recognition for the re-introduction of the Skyhawk and for Cessna's commitment to general aviation.

     

  • Bell Helicopter's first V-22 Osprey under the EMD contract made its maiden flight.

Automotive

  • Textron Automotive Company received the "Most Innovative Use of Plastics Award" from the Society of Plastic Engineers. Textron Automotive was honored for its interchangeable manufacturing setup design for right- and left-hand drive instrument panels on the 1997 Chrysler Jeep Wrangler.

     

  • Textron acquired Germany-based Kautex Werke Reinold Hagan AG, the world's largest producer of plastic automotive fuel tanks. Kautex's 1996 revenues were approximately $500 million, with more than 82% derived from outside North America. The acquisition closed on January 7, 1997.

Industrial

  • Textron acquired Switzerland-based Maag Pump Systems and Italy-based Maag Italia SpA, manufacturers of gears, gear pumps and gear systems for the plastics, chemical, pharmaceutical and railway industries. Combined 1996 revenues were $70 million.

     

  • HR Textron received an eight-year, Shell Oil Company contract to manufacture the space-age SMART PUMPsm automated fueling system.

Systems & Components

  • Textron Marine & Land Systems, teamed with Vickers Shipbuilding and Engineering Limited, received a U.S. Government contract for Engineering, Manufacturing, and Development (EMD) and options for the initial production of the Ultralightweight Field Howitzer. The contract, including the EMD and options for initial production, is valued at $151 million. The total program value could ultimately exceed $1.5 billion as anticipated requirements for Army and Marine Corps are filled.

Finance

  • Avco Financial Services continued its global growth with the following acquisitions:

    - France-based Locavia, an equipment leasing company with receivables of approximately $120 million. This acquisition provides entry for AFS into the French commercial financing market and supports the sale of Textron products throughout Europe.

    - Commercial Finance Capital, a U.K.-based equipment leasing company with approximately $46 million in receivables.

    - Purchase of $164 million receivable portfolio from TransAmerica.



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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