• Quarterly Revenue: $3.6 billion, down from $3.9 billion in Q4 2023.
• Quarterly Segment Profit: $283 million, down $101 million from Q4 2023.
• Quarterly Adjusted Income from Continuing Operations: $1.34 per share, compared to $1.60 per share in Q4 2023.
• Quarterly Manufacturing Cash Flow Before Pension Contributions: $306 million, down $74 million from Q4 2023.
• Full Year Revenue: $13.7 billion, up $19 million from 2023.
• Full Year Segment Profit: $1.2 billion, down $127 million from 2023.
• Full Year Adjusted Income from Continuing Operations: $5.48 per share, compared to $5.59 per share in 2023.
• Full Year Manufacturing Cash Flow Before Pension Contributions: $692 million, down $239 million from 2023.
• Aviation Backlog: $7.8 billion, an increase of $676 million from 2023.
• Bell Revenue Growth: 13.7% increase for the year.
• Systems Segment Profit Margin: 13.5% in the quarter.
• Total Company Backlog: $17.9 billion, up $4 billion from 2023.
• 2025 Revenue Projection: Approximately $14.7 billion, up 7% from 2024.
• 2025 Adjusted EPS Projection: $6 to $6.20.
• 2025 Manufacturing Cash Flow Before Pension Contributions Projection: $800 million to $900 million.
• Textron Aviation Quarterly Revenue: $1.3 billion, down $242 million from Q4 2023.
• Textron Aviation Quarterly Segment Profit: $100 million, down $93 million from Q4 2023.
• Bell Quarterly Revenue: $1.1 billion, up $58 million from Q4 2023.
• Bell Quarterly Segment Profit: $110 million, down $8 million from Q4 2023.
• Textron Systems Quarterly Revenue: $311 million, down $3 million from Q4 2023.
• Textron Systems Quarterly Segment Profit: $42 million, up $7 million from Q4 2023.
• Industrial Quarterly Revenue: $869 million, down $92 million from Q4 2023.
• Industrial Quarterly Segment Profit: $48 million, down $9 million from Q4 2023.
• eAviation Quarterly Revenue: $11 million with a segment loss of $22 million.
• Finance Segment Quarterly Revenue: $11 million with a profit of $5 million.
• Share Repurchases: Approximately 2.8 million shares in the quarter, totaling $232 million.

• Warning! GuruFocus has detected 7 Warning Sign with BKU.

Release Date: January 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Textron Inc (NYSE:TXT) reported a year-end backlog of $17.9 billion, up $4 billion from 2023, indicating strong future demand.
• The Aviation segment secured a significant order from Naval Air Systems Command for 26 Beechcraft King Air 260s, boosting its backlog.
• Bell segment experienced a 13.7% increase in revenues for the year, driven by the expansion of the FARA program.
• Textron Systems achieved a 13.5% segment profit margin and secured multiple contracts, including a $960 million contract from the Naval Sea Systems Command.
• The company is projecting a 7% revenue growth for 2025, with expected revenues of about $14.7 billion and adjusted EPS in the range of $6 to $6.20.

Negative Points

• Revenues in Q4 2024 were $3.6 billion, down from $3.9 billion in the same quarter of the previous year.
• Segment profit in Q4 2024 was $283 million, a decrease of $101 million compared to Q4 2023.
• Manufacturing cash flow before pension contributions was $306 million in Q4 2024, down $74 million from the previous year.
• The Industrial segment faced lower revenues and operating profit due to ongoing softness in specialized vehicles end markets.
• Textron eAviation reported a segment loss of $22 million in Q4 2024, primarily due to research and development expenses on new products.

Q & A Highlights

Q: Can you discuss the 2025 Aviation delivery expectations and the quarterly cadence of jet and turboprop deliveries? A: Scott Donnelly, CEO, explained that deliveries are expected to ramp up throughout the year as the factories recover from the strike. The production capacity will expand, driven by parts availability and workforce ramp-up. The margin is expected to progress through the year, with significant improvement anticipated as deliveries increase.

Q: What are the risks and opportunities within the 2025 guidance for Bell's revenues and margins? A: Scott Donnelly stated that most of the business is backed by backlog, with the FLRAA program supported by pending appropriations. The commercial business is well booked, and sustainment around V-22 and H-1 is predictable. There is not much downside risk to Bell's numbers for 2025.

Q: How does the cash flow guidance for 2025 compare to 2023, and what are the factors affecting it? A: Frank Connor, CFO, noted that cash flow will be more back-end loaded in 2025. The higher inventory levels at the end of 2024 and anticipated production ramp-up in 2025 will not provide much inventory benefit. Additionally, higher capital expenditures are expected, particularly for FLRAA prep activities at Bell.

Q: Has there been any change in demand at Aviation or Industrial since the US election? A: Scott Donnelly mentioned that there has been no significant change in demand. The backlog and aircraft availability have mitigated the usual pre-election slowdown, and demand has remained steady in both Aviation and Industrial segments.

Q: What are the expectations for R&D spending in 2025, and what caused the underrun in 2024? A: Scott Donnelly indicated that R&D spending is expected to stabilize at around $500 million in 2025. The underrun in 2024 was primarily due to the completion of the FARA program, which reduced R&D expenses. Going forward, R&D spending will be more normalized across the business segments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.