Industrial conglomerate Textron, Inc. (TXT) reported Wednesday a profit for the first quarter that edged up from last year. However, the company's shares are trading down nine percent in early deals after both earnings per share and quarterly revenues missed analysts' expectations. It also slashed earnings outlook for the full-year 2013, citing soft business jet demand.
"We saw strong growth in Bell commercial helicopters, Textron Systems defense products, and E-Z-GO vehicles, but demand in the business jet market was softer than expected," Chairman and CEO Scott Donnelly said in a statement.
The Providence, the Rhode Island-based maker of Cessna jets, Bell helicopters and E-Z-GO golf carts reported net income of $119 million or $ 0.41 per share for the first quarter, edging up from $118 million or $0.40 per share in the prior-year quarter.
Income from continuing operations for the quarter declined to $115 million or $0.40 per share from $120 million or $0.41 per share in the year-ago quarter.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.46 per share for the first quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter was relatively flat with last year at $2.86 billion, and missed nine Wall Street analysts' consensus estimate of $2.89 billion by a whisker.
Manufacturing revenues for the first quarter edged up to $2.81 billion from $2.80 billion in the year-ago quarter, and revenues for finance segment were $42 million, down from $61 million in the prior-year quarter, primarily due to lower finance receivables.
Breaking up manufacturing revenues further, the Bell segment, which mainly focuses on helicopters, saw revenues decreasing to $949 million from $994 million last year, due to lower military unit deliveries and lower commercial aftermarket sales.
Cessna segment, primarily manufacturing general aviation aircraft, had revenues grew to $708 million from $669 million in the year-ago quarter, reflecting an increase in used jet sales. However, Cessna new jet deliveries declined to 32 from last year's 38 jets.
The Industrial segment, which is mainly into manufacturing blow-molded fuel systems, had revenues of $727 million, down from $755 million in the prior-year quarter, due to lower Fuel Systems and Functional Components product line volumes, reflecting lower automotive demand in Europe and Asia.
Meanwhile, Textron Systems segment revenues grew to $429 million from $377 million a year ago, due to higher unmanned aircraft systems and weapons and sensors volumes, partially offset by lower vehicle deliveries within land and marine.
Looking ahead to fiscal 2013, Textron slashed its earnings from continuing operations guidance to a range of $1.90 to $2.10 per share from the prior forecast in the range of $2.10 to $2.30 per share. Street is currently looking for full-year 2013 earnings of $2.26 per share.
The company also lowered its guidance for 2013 business jet delivery due to the current business jet market conditions, and said it anticipates a decline in deliveries compared to 2012. Further, the company is adjusting production schedules and implementing other appropriate cost actions at Cessna.
"While we are taking these immediate actions, we believe the global business jet market still has significant long-term growth potential and we remain committed to our new product plans, which include introduction of the M2, and new Sovereign and Citation X models later this year, as well as the Latitude in 2015 and the Longitude in 2017," Donnelly added.
TXT closed Tuesday's regular trading session at $29.35, up $0.56 on a volume of 4.42 million shares.
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