PROVIDENCE, R.I. — (BUSINESS WIRE) — January 31, 2018 — Textron Inc. (NYSE: TXT) today announced financial results for the fourth quarter and full year of 2017, and provided guidance for its 2018 financial outlook.
Net earnings for the quarter were reduced by a provisional tax charge of $1.00 per share resulting from the enactment of the Tax Cuts and Jobs Act (“the Tax Act”), and $0.14 per share of restructuring charges. With these items that were disclosed in an 8-K filing earlier this month, the company reported a loss from continuing operations of $0.40 per share in the quarter, compared to income from continuing operations of $0.78 per share in the fourth quarter of 2016. Adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $0.74 per share for the fourth quarter of 2017 compared to $0.80 per share in the fourth quarter of 2016.
Revenues in the quarter were $4.0 billion, up 5.0 percent from the fourth quarter of 2016. Textron segment profit in the quarter was $360 million, down $31 million from the fourth quarter of 2016.
For the full year, net earnings were reduced by a provisional tax charge of $0.99 per share resulting from the Tax Act, and $0.32 per share of restructuring charges. Including these items, full-year income from continuing operations was $1.14 per share compared to $3.09 per share last year. Full-year adjusted income from continuing operations, the non-GAAP measure, was $2.45 per share, compared to $2.62 in 2016.
Net cash provided by operating activities of continuing operations of the manufacturing group for the full year was $947 million, compared to $988 million last year. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $889 million compared to $573 million last year.
“We delivered strong cash performance throughout the year and returned $603 million to shareholders through share repurchases and dividends,” said Textron Chairman and CEO Scott C. Donnelly.
Textron is forecasting 2018 revenues of approximately $14.6 billion, up 3.0 percent from the prior year. Textron expects full-year 2018 earnings per share from continuing operations will be in the range of $2.95 to $3.15. The company will benefit from the Tax Act and expects an effective tax rate of 22.5% for 2018.
The company is estimating net cash provided by operating activities of continuing operations of the manufacturing group will be between $1,170 million and $1,270 million and manufacturing cash flow before pension contributions (the non-GAAP measure) will be between $700 and $800 million, with planned pension contributions of about $55 million.
Donnelly continued, “Our outlook reflects the continuation of our strategy around growth through new product investments and acquisitions to drive increases in long-term shareholder value. In 2018, we expect these investments to drive increasing organic sales along with margin expansion and strong cash generation.”
Fourth Quarter Segment Results
Revenues at Textron Aviation of $1.4 billion were down 3 percent, primarily due to lower military volume.
Textron Aviation delivered 58 new Citation jets, flat with last year, 31 King Air turboprops up from 28 in last year’s fourth quarter, and 2 Beechcraft T-6 trainers, down from 8 last year.
Segment profit was $120 million in the fourth quarter, down from $135 million a year ago, primarily due to higher research and development expense.
Textron Aviation backlog at the end of the fourth quarter was $1.2 billion, up $15 million from the end of the third quarter.
Bell revenues were $983 million, up 11 percent on higher military volumes, partially offset by lower commercial volumes.
Segment profit of $114 million was down $12 million despite the increase in revenues, primarily related to a change in commercial mix.
Bell backlog at the end of the fourth quarter was $4.6 billion, down $407 million from the end of the third quarter.
Revenues at Textron Systems were $489 million, down from $532 million last year largely on lower volume at Weapons and Sensors.
Segment profit of $37 million was down from $53 million, primarily reflecting the lower volume at Weapons and Sensors.
Textron Systems’ backlog at the end of the fourth quarter was $1.4 billion, down $67 million from the end of the third quarter.
Industrial revenues were $1.1 billion, up 20 percent largely related to