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Textron Inc. Reports Operating Results (10-Q)

October 30, 2009 | About:
10qk

10qk

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Textron Inc. (TXT) filed Quarterly Report for the period ended 2009-10-16.

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

Read the The complete ReportTXT is in the portfolios of John Keeley of Keeley Fund Management.

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