ShareHave more to add? News tip? Tell us
Textron Inc. reported a small but surprising profit Tuesday despite a nearly 27 percent decline in revenue as sales of Cessna business jets and Bell helicopters fell.
The parent company of Fort Worth-based Bell Helicopter reported net income of $4 million, or 1 cent a share, on revenues of $2.55 billion. Wall Street analysts had predicted a loss of 3 cents a share, and the company’s shares jumped 7 percent as a result.A year ago, Textron reported a profit of $206 million, or 83 cents a share, on revenues of $3.5 billion.Textron CEO Lewis Campbell said that "given the economic environment we’re in, it was a positive quarter of operations." Campbell will be replaced as CEO in December by President Scott Donnelly.Textron’s core businesses, particularly Wichita, Kan.-based Cessna Aircraft Co. and Textron Finance, have been hammered in the recession. Textron responded this year with massive cost cuts, including closing facilities, laying off thousands of workers and restructuring debt.As a result, Campbell said, Textron, which a few months ago seemed in danger of being broken up, "is solidly positioned for profitable growth" when the economy rebounds.Bell’s operating profit was $79 million, up $16 million from a year earlier. Revenues declined 11 percent, or $74 million, to $628 million, largely because of lower commercial helicopter sales and deliveries.Revenues at Cessna fell 42 percent to $82.5 million and profit plunged to $32 million, down from $238 million a year ago. Cessna’s business jet sales dried up as the economic collapse unfolded. The company had 119 orders canceled during the quarter, most for 2011 deliveries. Cessna has laid off upwards of 10,000 workers.Bell’s immediate future is considerably brighter because of its backlog of military orders. Bell delivered four V-22 Osprey aircraft to the military during the quarter, a rate that will increase to 10 a quarter during the next two years. The company is also gradually increasing production of Marine helicopters. "Bell is still very much in a long-term ramp-up mode," Donnelly said. He said the assignment in August of John Garrison to take over as Bell CEO is "a transition that had been planned for some time" to deal with anticipated growth."We recognized the need to put a good long-term player into Bell so that he can get to know the customers and ramp up the business at the same time."Textron shares (ticker: TXT) closed up $1.31 at $19.67.Textron said it expects full-year earnings, excluding special charges, in the upper end of its previous guidance of 33 to 63 cents a share on revenue of about $10.6 billion.Analysts, who sometimes exclude certain items from their estimates, expected Textron to post a loss of 6 cents per share on revenue of $10.3 billion.This report includes material from The Associated Press.BOB COX, 817-390-7723
@Nyx.CommentBody@