TEXTRON INC Q1 FY2025 earnings call

• Aviation: Delivered 31 jets and 30 commercial turboprops; fleet utilization strong with aftermarket revenue up 6%; sold seven King Air 260 training aircraft; GE Aerospace Catalyst engine certified for Beechcraft Denali program with over 2,700 flight hours and 1,000 flights.
• Bell: Revenues up 35% driven by military and commercial growth; FLARA program progressing with design maturation; delivered 29 helicopters; awarded CMV-22 contract extension and purchase agreement with Air Methods.
• Systems: Revenues slightly lower due to Shadow program cancellation; segment profit margin 13.5%, up 10 basis points; received $100 million Navy contract for support software development and delivered 13th ship-to-shore connector craft.
• Industrial: Lower revenues; completed Power Sports business sale; successfully completed first hover flight of Nuva V300 unmanned aircraft.

Textron Aviation had revenues of $1.2 billion, up $24 million, with profit of $127 million, down $16 million, and backlog of $7.9 billion. Bell had revenues of $983 million, up $256 million, segment profit of $90 million, up $10 million, and backlog of $7.1 billion. Textron Systems had revenues of $290 million, down $10 million, segment profit of $40 million, up $2 million, and backlog of $2.3 billion. Industrial had revenues of $792 million, down $100 million, with segment profit essentially unchanged. Textron eAviation had revenues of $7 million and a loss of $17 million. Finance had revenues of $16 million and profit of $10 million.

Reaffirmed full-year adjusted earnings per share to be in the range of $6 to $6.20. Expect full-year manufacturing cash flow before pension contributions to be $800 to $900 million.

Tariff impact on global operations, currently de minimis; macroeconomic uncertainty affecting customer spending.

Q: On the Arctic Cat disposal, are you considering further portfolio actions?

A: Nothing that we're announcing, Rob. We always look at the portfolio, but we certainly would never pre-announce.

Q: Bell's revenue growth, puts and takes on FLARA?

A: Sure. Sheila, I think we had a very big increase obviously on a Q1 to Q1 basis. We did have very strong performance in terms of deliveries on the commercial helicopter side, but we also had a very large increase on the FLARA program. Q1 was sort of still early in the program. Obviously, we're full run at this point. It's not only our internal level of activity, but a lot more suppliers on board as we're starting to issue drawings and get things on purchase authorizations and actually start to build first parts in many cases. So we're seeing a real step function. I do still believe if you look at FLARA on a year-over-year basis, it's probably going to be up 20% or so. So it will be a contributor through the course of the year. I think the margins are roughly in line with where we guided. I think that'll be relatively consistent through the course of the year. As we see a large mix of the FLARA program driving a lot of the growth and commercial helicopters. OEM deliveries, as you know, tend to be a little bit dilutive to our overall margin rate. But I think all in all, Bell had a great quarter, and we would expect to continue to see nice growth and solid performance through the balance of the year.

Q: On industrial how the Arctic Cat and certain product line sales impact revenues and profitability for the remainder of the year?

A: Yeah. So we'll be down a little bit on revenue. When we did the guide, we assumed first quarter, which obviously revenue in line with what we expected here in Q1. We did have some revenue through the balance of the year in expectation that we would need to run this as an aftermarket business. Obviously, as a result of the sale, which was really our desired outcome, we won't have that revenue in the next three quarters, but it's pretty de minimis. So I think we'll still be in the guide range on the revenue side and probably have a little bit movement towards the upper end of the guide in terms of margin.