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Will Segment Sales Boost Textron's (TXT) Q2 Earnings?
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Textron Inc. (TXT - Free Report) is scheduled to release its second-quarter 2024 results on Jul 18 before market open.
The company holds a four-quarter average earnings surprise of 9.33%. The solid revenue performance across the majority of its business segments is likely to have contributed to Textron’s overall performance in the second quarter of 2024.
Textron Aviation – a Key Contributor to Revenues
Solid growth in aftermarket revenues, bolstered by solid aircraft utilization driven by improved air travel in recent years, is likely to have benefited Textron Aviation’s revenue performance in the second quarter. Revenues earned from robust jet and commercial turboprop deliveries can also be expected to have boosted this segment’s top line.
The Zacks Consensus Estimate for this segment’s revenues in the second quarter is pegged at $1,455.8 million, which indicates an improvement of 6.9% from revenues reported in the year-ago quarter.
Bell’s Performance to Remain Solid
Higher military volumes, backed by the continued ramp-up of the FLRAA program, are projected to have bolstered the Bell unit’s revenue performance in the second quarter of 2024. Moreover, at the onset of the second quarter, the Bell unit successfully delivered the 800th commercial aircraft cabin to the Bell Canada Assembly Center for aircraft assembly. Such deliveries are also expected to boost this segment’s top line.
However, a lower volume of V-22 and H-1 programs might adversely impact this segment’s overall revenue to some extent. The Zacks Consensus Estimate for the Bell segment’s revenues in the second quarter is pegged at $815.1 million, which indicates growth of 16.3% from revenues reported in the year-ago quarter.
Textron Systems’ Revenues to Remain Robust
Higher sales volumes from the majority of the Textron System’s programs must have added impetus to the Textron Systems unit’s revenue performance in the second quarter of 2024.
The Zacks Consensus Estimate for Textron System’s revenues in the second quarter is pegged at $312.8 million, which implies a rise of 2.2% reported in the year-ago quarter.
Industrial Unit to Show Weakness
Lower volumes from the specialized vehicles product line are likely to have impacted the Industrial segment’s performance in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for Industrial’s second-quarter revenues is pegged at $965.1 million, which calls for a decline of 5.9% from the year-ago quarter.
Q2 Estimates
The expected robust revenue performance in the majority of its business segments must have boosted TXT’s overall top line in the second quarter. The Zacks Consensus Estimate for second-quarter revenues is pegged at $3.54 billion, which suggests a rise of 3.5% from the year-ago quarter’s reported figure.
A strong top line, along with the favorable impact of pricing, is likely to have boosted the company’s bottom line in the second quarter of 2024.
However, special charges might have adversely impacted TXT’s overall earnings performance. On Apr 24, 2024, the company’s board of directors approved the expansion of Textron’s 2023 restructuring plan to further reduce operating expenses through headcount reductions.
The company is expected to have incurred additional severance costs in the second quarter of 2024 in the range of $25 million-$30 million, largely related to headcount reductions within the Industrial segment, which might have pulled down its overall earnings figure.
The Zacks Consensus Estimate for TXT’s second-quarter earnings is pegged at $1.51 per share. This calls for an improvement of 3.4% from the prior-year reported figure.
Backlog Projections Suggest Growth
The strong demand for the company’s products can be gauged by its backlog strength. In this context, our model suggests Textron’s backlog will increase by 4.2% to $14.89 billion in the second quarter of 2024.
Our proven model does not conclusively predict an earnings beat for TXT this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.
Earnings ESP: Textron has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, TXT carries a Zacks Rank #4 (Sell).
Stocks to Consider
Below we have mentioned the following players from the same industry that have the right combination of elements to beat on earnings in the upcoming releases.
The Zacks Consensus Estimate for LMT’s second-quarter earnings is pegged at $6.44 per share while the same for sales is pegged at $17.06 billion. The company delivered a four-quarter average earnings surprise of 6.07%.
Northrop Grumman (NOC - Free Report) is slated to report its second-quarter 2024 results on Jul 25 before market open. It has an Earnings ESP of +0.86% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for NOC’s second-quarter earnings stands at $5.98 per share, which suggests a 12% improvement from the second-quarter 2023 reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $10.08 billion, which implies a 5.3% increase from that reported in the prior-year quarter.
Huntington Ingalls Industries (HII - Free Report) is expected to report its second-quarter 2024 results on Aug 1 before market open. It has an Earnings ESP of +0.39% and carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for HII’s second-quarter earnings stands at $3.59 per share, which suggests a 9.8% improvement from the second-quarter 2023 reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $2.84 billion, which implies a 1.9% increase from that reported in the prior-year quarter.
Image: Bigstock
Will Segment Sales Boost Textron's (TXT) Q2 Earnings?
Textron Inc. (TXT - Free Report) is scheduled to release its second-quarter 2024 results on Jul 18 before market open.
The company holds a four-quarter average earnings surprise of 9.33%. The solid revenue performance across the majority of its business segments is likely to have contributed to Textron’s overall performance in the second quarter of 2024.
Textron Aviation – a Key Contributor to Revenues
Solid growth in aftermarket revenues, bolstered by solid aircraft utilization driven by improved air travel in recent years, is likely to have benefited Textron Aviation’s revenue performance in the second quarter. Revenues earned from robust jet and commercial turboprop deliveries can also be expected to have boosted this segment’s top line.
The Zacks Consensus Estimate for this segment’s revenues in the second quarter is pegged at $1,455.8 million, which indicates an improvement of 6.9% from revenues reported in the year-ago quarter.
Bell’s Performance to Remain Solid
Higher military volumes, backed by the continued ramp-up of the FLRAA program, are projected to have bolstered the Bell unit’s revenue performance in the second quarter of 2024. Moreover, at the onset of the second quarter, the Bell unit successfully delivered the 800th commercial aircraft cabin to the Bell Canada Assembly Center for aircraft assembly. Such deliveries are also expected to boost this segment’s top line.
However, a lower volume of V-22 and H-1 programs might adversely impact this segment’s overall revenue to some extent. The Zacks Consensus Estimate for the Bell segment’s revenues in the second quarter is pegged at $815.1 million, which indicates growth of 16.3% from revenues reported in the year-ago quarter.
Textron Systems’ Revenues to Remain Robust
Higher sales volumes from the majority of the Textron System’s programs must have added impetus to the Textron Systems unit’s revenue performance in the second quarter of 2024.
The Zacks Consensus Estimate for Textron System’s revenues in the second quarter is pegged at $312.8 million, which implies a rise of 2.2% reported in the year-ago quarter.
Industrial Unit to Show Weakness
Lower volumes from the specialized vehicles product line are likely to have impacted the Industrial segment’s performance in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for Industrial’s second-quarter revenues is pegged at $965.1 million, which calls for a decline of 5.9% from the year-ago quarter.
Q2 Estimates
The expected robust revenue performance in the majority of its business segments must have boosted TXT’s overall top line in the second quarter. The Zacks Consensus Estimate for second-quarter revenues is pegged at $3.54 billion, which suggests a rise of 3.5% from the year-ago quarter’s reported figure.
A strong top line, along with the favorable impact of pricing, is likely to have boosted the company’s bottom line in the second quarter of 2024.
However, special charges might have adversely impacted TXT’s overall earnings performance. On Apr 24, 2024, the company’s board of directors approved the expansion of Textron’s 2023 restructuring plan to further reduce operating expenses through headcount reductions.
The company is expected to have incurred additional severance costs in the second quarter of 2024 in the range of $25 million-$30 million, largely related to headcount reductions within the Industrial segment, which might have pulled down its overall earnings figure.
The Zacks Consensus Estimate for TXT’s second-quarter earnings is pegged at $1.51 per share. This calls for an improvement of 3.4% from the prior-year reported figure.
Backlog Projections Suggest Growth
The strong demand for the company’s products can be gauged by its backlog strength. In this context, our model suggests Textron’s backlog will increase by 4.2% to $14.89 billion in the second quarter of 2024.
Textron Inc. Price and EPS Surprise
Textron Inc. price-eps-surprise | Textron Inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for TXT this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.
Earnings ESP: Textron has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, TXT carries a Zacks Rank #4 (Sell).
Stocks to Consider
Below we have mentioned the following players from the same industry that have the right combination of elements to beat on earnings in the upcoming releases.
Lockheed Martin (LMT - Free Report) is set to report second-quarter earnings on Jul 23 before market open. It has an Earnings ESP of +2.59% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LMT’s second-quarter earnings is pegged at $6.44 per share while the same for sales is pegged at $17.06 billion. The company delivered a four-quarter average earnings surprise of 6.07%.
Northrop Grumman (NOC - Free Report) is slated to report its second-quarter 2024 results on Jul 25 before market open. It has an Earnings ESP of +0.86% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for NOC’s second-quarter earnings stands at $5.98 per share, which suggests a 12% improvement from the second-quarter 2023 reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $10.08 billion, which implies a 5.3% increase from that reported in the prior-year quarter.
Huntington Ingalls Industries (HII - Free Report) is expected to report its second-quarter 2024 results on Aug 1 before market open. It has an Earnings ESP of +0.39% and carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for HII’s second-quarter earnings stands at $3.59 per share, which suggests a 9.8% improvement from the second-quarter 2023 reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $2.84 billion, which implies a 1.9% increase from that reported in the prior-year quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.