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Why Is Textron (TXT) Up 2.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Textron (TXT - Free Report) . Shares have added about 2.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Textron due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Textron reported fourth-quarter 2022 adjusted earnings of $1.07 per share, which surpassed the Zacks Consensus Estimate of $1.01 by 5.9%. The bottom line also improved by 13.8% from the year-ago quarter’s figure.
For the full-year 2022, the company reported earnings of $4.01 per share, which beat the Zacks Consensus Estimate of $3.94 by 1.8%.
Revenues
Total revenues came in at $3,636 million, which missed the Zacks Consensus Estimate of $3,670.2 million by 0.9%. However, the reported figure increased 9.5% from the year-ago quarter’s $3,322 million.
For the full-year 2022, total revenues came in at $12.87 billion, lagging the Zacks Consensus Estimate of $12.88 billion by 0.1%. However, net sales improved 3.9% year over year.
Manufacturing revenues improved by 9.5% in the fourth quarter to $3,625 million, while revenues in the Finance division remained flat at $11 million.
Segmental Performance
Textron Aviation: In the quarter under review, revenues in this segment increased 16.4% year over year to $1,582 million. The increase was primarily due to the higher Citation jet and defense volume. The segment delivered 52 jets, up from 46 in the year-ago quarter. It also delivered 47 commercial turboprops, up from 43 in the fourth quarter of 2021.
The segment generated an operating profit of $169 million in the quarter compared with the $137 million earned in the year-ago quarter due to a higher volume and mix and a favorable pricing impact.
The order backlog at the end of the quarter was $6.4 billion.
Bell: Revenues in this segment declined 4.9% to $816 million. Lower revenues were mainly due to lower military revenues.
The segment delivered 71 commercial helicopters in the quarter, up from 59 last year. The segment’s profit was down 19.3% to $71 million due to a lower volume and mix. Bell’s order backlog at the end of the quarter was $4.8 billion, down sequentially from $4.9 billion.
Textron Systems: Revenues in this segment came in at $314 million, up 0.3% from the year-ago period. Segmental profits declined 11.1% year over year to $40 million in the fourth quarter.
Textron Systems’ backlog at the end of the fourth quarter was $2.1 billion.
Industrial: Revenues in this segment improved by 16.1% to $907 million due to a favorable pricing impact and a higher volume and mix, primarily on the Specialized Vehicle product line.
Moreover, the segment’s profit was $42 million compared with $38 million in the previous-year quarter. The improvement can be attributed to a higher volume and mix.
Textron eAviation: Revenues in the segment came in at $6 million. Meanwhile, the segment reported a loss of $10 million in the fourth quarter of 2022.
Finance: Revenues in this segment remained flat at $11 million compared with the year-ago quarter. The profit came in at $5 million in the fourth quarter compared with $2 million in the year-ago period.
Financials
As of Dec 31, 2022, cash and cash equivalents totaled $1,963 million compared with $1,922 million as of Jan 1, 2022. Cash flow from operating activities amounted to $1,461 million in 2022 compared with $1,469 million in the year-ago period.
Capital expenditures were $354 million in 2022 compared with the $375 million recorded in 2021. The long-term debt was $3,175 million as of Dec 31, 2022 compared with $3,179 million as of Jan 1, 2022.
Guidance
Textron initiated its 2023 financial guidance. The company expects 2023 sales to be $14 billion. The Zacks Consensus Estimate for 2023 sales of $13.69 billion is marginally low compared with TXT’s guidance.
The company expects 2023 earnings in the range of $5.00-$5.20 per share. The Zacks Consensus Estimate of $4.39 per share is lower than the midpoint of the company’s guidance.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 9.58% due to these changes.
VGM Scores
Currently, Textron has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Textron has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Textron (TXT) Up 2.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Textron (TXT - Free Report) . Shares have added about 2.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Textron due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Textron Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Textron reported fourth-quarter 2022 adjusted earnings of $1.07 per share, which surpassed the Zacks Consensus Estimate of $1.01 by 5.9%. The bottom line also improved by 13.8% from the year-ago quarter’s figure.
For the full-year 2022, the company reported earnings of $4.01 per share, which beat the Zacks Consensus Estimate of $3.94 by 1.8%.
Revenues
Total revenues came in at $3,636 million, which missed the Zacks Consensus Estimate of $3,670.2 million by 0.9%. However, the reported figure increased 9.5% from the year-ago quarter’s $3,322 million.
For the full-year 2022, total revenues came in at $12.87 billion, lagging the Zacks Consensus Estimate of $12.88 billion by 0.1%. However, net sales improved 3.9% year over year.
Manufacturing revenues improved by 9.5% in the fourth quarter to $3,625 million, while revenues in the Finance division remained flat at $11 million.
Segmental Performance
Textron Aviation: In the quarter under review, revenues in this segment increased 16.4% year over year to $1,582 million. The increase was primarily due to the higher Citation jet and defense volume. The segment delivered 52 jets, up from 46 in the year-ago quarter. It also delivered 47 commercial turboprops, up from 43 in the fourth quarter of 2021.
The segment generated an operating profit of $169 million in the quarter compared with the $137 million earned in the year-ago quarter due to a higher volume and mix and a favorable pricing impact.
The order backlog at the end of the quarter was $6.4 billion.
Bell: Revenues in this segment declined 4.9% to $816 million. Lower revenues were mainly due to lower military revenues.
The segment delivered 71 commercial helicopters in the quarter, up from 59 last year. The segment’s profit was down 19.3% to $71 million due to a lower volume and mix. Bell’s order backlog at the end of the quarter was $4.8 billion, down sequentially from $4.9 billion.
Textron Systems: Revenues in this segment came in at $314 million, up 0.3% from the year-ago period. Segmental profits declined 11.1% year over year to $40 million in the fourth quarter.
Textron Systems’ backlog at the end of the fourth quarter was $2.1 billion.
Industrial: Revenues in this segment improved by 16.1% to $907 million due to a favorable pricing impact and a higher volume and mix, primarily on the Specialized Vehicle product line.
Moreover, the segment’s profit was $42 million compared with $38 million in the previous-year quarter. The improvement can be attributed to a higher volume and mix.
Textron eAviation: Revenues in the segment came in at $6 million. Meanwhile, the segment reported a loss of $10 million in the fourth quarter of 2022.
Finance: Revenues in this segment remained flat at $11 million compared with the year-ago quarter. The profit came in at $5 million in the fourth quarter compared with $2 million in the year-ago period.
Financials
As of Dec 31, 2022, cash and cash equivalents totaled $1,963 million compared with $1,922 million as of Jan 1, 2022. Cash flow from operating activities amounted to $1,461 million in 2022 compared with $1,469 million in the year-ago period.
Capital expenditures were $354 million in 2022 compared with the $375 million recorded in 2021. The long-term debt was $3,175 million as of Dec 31, 2022 compared with $3,179 million as of Jan 1, 2022.
Guidance
Textron initiated its 2023 financial guidance. The company expects 2023 sales to be $14 billion. The Zacks Consensus Estimate for 2023 sales of $13.69 billion is marginally low compared with TXT’s guidance.
The company expects 2023 earnings in the range of $5.00-$5.20 per share. The Zacks Consensus Estimate of $4.39 per share is lower than the midpoint of the company’s guidance.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 9.58% due to these changes.
VGM Scores
Currently, Textron has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Textron has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.