Textron Inc. Reports Operating Results (10-Q)
Textron Inc. is a global multi-industry company with operations in fivebusiness segments - Aircraft Fastening Systems Industrial Components Industrial Products and Finance. The company's products include commercial and military helicopters light and mid-size business jets plastic fuel tanks automotive trim products golf cars and utility vehicles turf-care equipment industrial pumps and gears engineered fastening systems and solutions and other industrial products. It also is a commercial finance company for select markets. Textron Inc. has a market cap of $5.14 billion; its shares were traded at around $19.01 with a P/E ratio of 11.9 and P/S ratio of 0.3. The dividend yield of Textron Inc. stocks is 0.4%. Textron Inc. had an annual average earning growth of 3% over the past 10 years. Highlight of Business Operations:For the nine months ended October 3, 2009, Cessna s segment profit decreased $537 million compared with the corresponding period of 2008, primarily due to a $639 million impact from lower sales volume, which includes both the impact of lower sales commissions and $34 million due to idle capacity related to lower production levels and temporary plant shutdowns. This decrease was partially offset by $50 million of favorable cost performance and a $50 million gain in the first quarter of 2009 on the sale of assets related to CESCOM, which provided maintenance tracking services to Cessna s customers.
Cessna s favorable cost performance includes $77 million in lower engineering, selling and administrative expense, largely due to the workforce reductions in 2009, and $66 million in forfeiture income from order cancellations, partially offset by a $43 million increase in write-downs of pre-owned aircraft inventory, reflecting lower fair market values due to an excess supply in the market, higher warranty expense of $14 million, an increase in inventory reserves of $14 million and unfavorable performance at CitationAir of $11 million.
Bell s revenues decreased $74 million in the third quarter of 2009, compared with the corresponding period of 2008. The decrease in revenues primarily reflects lower commercial helicopter volume of $80 million, reflecting the timing of certain deliveries and lower customer demand, and the impact of the 2008 cancellation of the ARH program, which contributed $32 million of revenue in 2008. These decreases were partially offset by increased pricing of $23 million, primarily for certain commercial helicopters.
Bell s segment profit increased by $16 million in the third quarter of 2009, compared with the corresponding period of 2008, primarily due to lower selling and administrative expenses of $16 million, an $11 million gain on a Canadian currency exchange contract, lower research and development costs of $10 million and a $9 million impact of higher pricing in excess of inflation. These increases were partially offset by lower volume of $18 million and a change in product mix of $13 million, which principally relates to commercial helicopters. We recognized a gain on a Canadian currency exchange contract that was unwound during the quarter due to a significant decline in the production activity that we had hedged.
For the nine months ended October 3, 2009, Bell s revenues increased $66 million compared with the corresponding period of 2008. Approximately 94% of the increase is due to higher pricing, primarily related to certain commercial helicopters, while higher volume accounted for 6% of the increase. Our volume increased $89 million for the V-22 program, $27 million in the Kiowa Warrior Safety Enhancement Program and $14 million in Huey II Kits, while volume decreased $72 million for commercial helicopters and $61 million related to the ARH program.
For the nine months ended October 3, 2009, Bell s segment profit increased by $36 million compared with the corresponding period of 2008, primarily due to higher pricing in excess of inflation of $29 million and improved cost performance of $22 million, partially offset by a change in product mix primarily due to commercial helicopters of $12 million. The improved cost performance primarily reflects lower selling and administrative expenses of $16 million, lower research and development costs of $10 million and an $11 million gain on the Canadian currency exchange contract unwound in the third quarter, as discussed above. These cost improvements were partially offset by higher warra
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