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Textron reported a first quarter 2021 net income of $0.75 per share, with adjusted net income at $0.70, up from $0.35 a year ago. Revenues increased due to higher volumes in Industrial and Bell, alongside solid margins. Cash flow from operations was $107 million, a significant improvement from a $393 million outflow the previous year. Textron forecasts 2021 EPS between $2.76 and $3.00, raising its outlook by $0.10. Segment performances show a mixed bag, with Textron Aviation reporting lower revenues but improved profits, while Bell faced challenges with military revenues.
Positive
First quarter net income increased to $0.75 per share from $0.35 last year.
Adjusted net income rose to $0.70 per share, reflecting strong operational performance.
Operating cash flow improved to $107 million from a cash outflow of $393 million last year.
Textron expects 2021 EPS guidance raised to $2.76-$3.00, a $0.10 increase from previous estimates.
Negative
Textron Aviation revenues decreased by $7 million year-over-year.
Bell segment profit fell by $10 million due to increased research and development costs.
Textron Aviation delivered fewer commercial turboprops (14 vs. 16 last year).
Textron Inc. (NYSE: TXT) today reported first quarter 2021 net income of $0.75 per share. Adjusted net income, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $0.70 per share for the first quarter of 2021, compared to $0.35 per share in the first quarter of 2020.
“Revenues were higher in the quarter primarily driven by higher volumes at Industrial and Bell, with solid margin performance across all our segments,” said Textron Chairman and CEO Scott C. Donnelly. “We also saw improving commercial aircraft demand at both Aviation and Bell in the quarter.”
Cash Flow
Net cash provided by operating activities of continuing operations of the manufacturing group for the first quarter was $107 million, compared to a cash outflow of $393 million last year. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, totaled $71 million compared to a use of cash of $430 million last year.
In the quarter, Textron returned $91 million to shareholders through share repurchases.
Outlook
Textron now expects 2021 earnings per share from continuing operations to be in a range of $2.76 to $3.00, or $2.80 to $3.00 on an adjusted basis, up $0.10 from our previous outlook. Textron reiterated its expectation for cash flow from continuing operations of the manufacturing group before pension contributions of $600 to $700 million with planned pension contributions of about $50 million.
Donnelly continued, “With a strong start to the year, we expect to see continuing improvements in commercial demand across our end-markets.”
First Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation of $865 million were down $7 million from the first quarter of 2020, due to lower volume, primarily reflecting lower aftermarket volume, partially offset by higher pricing.
Textron Aviation delivered 28 jets, up from 23 last year, and 14 commercial turboprops, down from 16 last year.
Segment profit was $47 million in the first quarter, up $44 million from a year ago, primarily due to a favorable impact from performance of $25 million and a favorable mix of products sold.
Textron Aviation backlog at the end of the first quarter was $2.1 billion.
Bell
Bell revenues were $846 million, up $23 million from last year, on higher commercial revenues of $66 million, partially offset by lower military revenues.
Bell delivered 17 commercial helicopters in the quarter, up from 15 last year.
Segment profit of $105 million was down $10 million, primarily due to an unfavorable impact from performance reflecting higher research and development costs in the quarter, largely related to the future vertical lift programs.
Bell backlog at the end of the first quarter was $5.2 billion.
Textron Systems
Revenues at Textron Systems were $328 million, flat with last year.
Segment profit of $51 million was up $25 million from a year ago, primarily due to a favorable impact from performance and other of $27 million.
Textron Systems’ backlog at the end of the first quarter was $2.4 billion.
Industrial
Industrial revenues were $825 million, an increase of $85 million from last year, primarily due to higher volume and mix of $47 million and a favorable impact of $20 million from pricing, primarily in the Specialized Vehicles product line, and $18 million from foreign exchange rate fluctuations.
Segment profit of $47 million was up $38 million from the first quarter of 2020, reflecting higher volume and mix of $16 million, favorable pricing, net of inflation of $11 million and favorable performance of $11 million, largely in the Specialized Vehicles product line.
Finance
Finance segment revenues were up $1 million, and profit was up $3 million from last year’s first quarter.
Conference Call Information
Textron will host its conference call today, April 29, 2021 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 (844) 721-7241 in the U.S. or (409) 207-6955 outside of the U.S.; Access Code: 4252363.
In addition, the call will be recorded and available for playback beginning at 11:00 a.m. (Eastern) on Thursday, April 29, 2021 by dialing (402) 970-0847; Access Code: 9928221.
