By Calvin Biesecker
Textron Inc. [TXT] yesterday swung to a profit in the first quarter due to lower charges, higher sales and improved operating results at its Bell and Industrial segments.
Net income was $29 million, 9 cents earnings per share (EPS), versus an $8 million (3 cents EPS) loss a year ago. The company recorded $23 million (6 cents EPS) in pre-tax special charges a year ago due to severance costs and taxes related to the federal health care legislation.
Excluding losses from discontinued operations, net income was $31 million (10 cents EPS), missing consensus estimates by 7 cents EPS.
Losses widened at Textron’s Cessna aircraft division due to lower forfeiture income from fewer aircraft deliveries and higher than expected costs related to the production ramp-up for its new Citation CJ4 business jet and inflation. Cessna recorded a $38 million operating loss despite a 28 percent jump in sales to $556 million on a better sales mix and higher used jet deliveries.
At Bell, operating profits increased 23 percent to $91 million on higher military aircraft deliveries–both the V-22 and H-1–which more than offset higher research and development costs. Sales increased 21 percent to $749 million due to the higher military aircraft production. Commercial helicopter deliveries were flat.
At the Textron Systems segment, operating profits and sales both declined slightly due to lower aftermarket services for the company’s Armored Security Vehicle.
Sales and profits were both up at the company’s Industrial segment.
Backlog at Cessna, Bell and Textron Systems was a combined $11.5 billion at the end of the quarter, down $174 million overall since the end of 2010. The decrease was driven by Cessna, although company officials said yesterday that the business jet aircraft market is coming back, just slower than they would like.
Guidance was left unchanged for the year with earnings from continuing operations expected to be between $1 and $1.15 EPS.