Textron Inc. (NYSE: TXT) today reported first quarter 2011 income from continuing operations of $0.10 per share, compared to a loss from continuing operations of $0.01 per share in the first quarter of 2010. Last year's loss from continuing operations included $0.06 per share in special charges.
Revenues in the quarter were $2.5 billion, up 12.2 percent from the year-ago quarter, as a 14.9 percent growth in manufacturing revenues more than offset lower revenues at the Finance segment. Manufacturing segment profit was $167 million, up $13 million from the first quarter of 2010.
"First quarter results benefited from strong execution and cost performance at Bell, Systems and Industrial," said Textron Chairman and CEO Scott C. Donnelly.
Donnelly added, "However, at Cessna, low production and delivery levels led to an operating loss in the quarter. Looking forward, we expect improved profitability as volumes recover and the impacts of our continuing cost reduction and productivity programs take effect."
Manufacturing cash flow before pension contributions reflected a use of cash of $55 million during the first quarter compared to a use of cash of $134 million during last year's first quarter. Managed receivables in the Finance segment were reduced by $485 million, ending the quarter at $4.1 billion. Textron's consolidated net debt was $4.7 billion, down $352 million from the end of 2010.
Textron reiterated its forecast of 2011 earnings per share from continuing operations of $1.00 to $1.15 and manufacturing cash flow from continuing operations before pension contributions of between $800 and $850 million.
Donnelly continued, "The demand environment for our commercial aircraft continued to show signs of recovery on a year-over-year basis, despite economic disruptions that occurred during the quarter and we still expect a slight increase in commercial deliveries at both Bell and Cessna this year."
First Quarter Segment Results
Cessna delivered 31 new Citation jets in the quarter, flat with deliveries in last year's first quarter. However, revenues increased $123 million in the first quarter, reflecting a higher mix of light to mid-sized new jets and higher used jet deliveries.
Segment loss increased $14 million, as the contribution from higher revenues was more than offset by lower deposit forfeiture income due to fewer order cancellations, higher engineering and development costs and inflation.
Cessna backlog at the end of the first quarter was $2.6 billion, down $293 million from the end of 2010.
Bell revenues increased $131 million in the first quarter from the same period in the prior year. Bell delivered 9 V-22's and 4 H-1's in the quarter compared to 4 V-22's and 3 H-1's in last year's first quarter. Bell delivered 15 commercial aircraft in the quarter, flat with deliveries in the first quarter of 2010.
Segment profit increased $17 million, as the impact of higher military production and deliveries more than offset increased research and development costs.
Bell backlog at the end of the first quarter was $7.3 billion, up $119 million from the end of 2010.
Revenues at Textron Systems decreased $13 million primarily due to lower armored security vehicle aftermarket services.
Segment profit decreased $2 million, primarily due to the lower revenues.
Textron Systems backlog at the end of the first quarter was $1.6 billion, flat with the end of 2010.
Revenues increased $78 million in the first quarter primarily due to higher volumes at Kautex, Greenlee and Jacobsen, which led to an increase in segment profit of $12 million.
Finance segment revenues decreased $50 million compared to the first quarter of 2010, primarily due to reduced earnings on lower finance receivables.
Finance segment loss was lower by $14 million, primarily due to lower loan loss provisions and lower operating expenses, partially offset by lower interest margin on the reduced portfolio of finance receivables and higher portfolio losses.
Since the end of 2010, nonaccrual finance receivables decreased from $850 million to $836 million, while sixty-day plus delinquencies increased to $418 million from $411 million.
Charge-offs in the first quarter were $16 million compared with $24 million in the fourth quarter of 2010.
Managed receivables ended the quarter at $4.1 billion, down $485 million from the end of last year.
Manufacturing cash flow before pension contributions is a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release.
Conference Call Information
Textron will host its conference call today, April 20, 2011 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) 288-8968 in the U.S. or (612) 332-0725 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 Wednesday, April 20, 2011 by dialing (320) 365-3844; Access Code: 186398.
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 Helicopter, Cessna Aircraft Company, Jacobsen, Kautex, Lycoming, E-Z-GO, Greenlee, and Textron Systems. More information is available at www.textron.com.