Textron reports third-quarter loss, but Bell Helicopter performs well

Oct. 21, 2010


Oct. 21--Textron Inc. disappointed Wall Street on Wednesday by reporting a third-quarter loss and lower-than-expected revenue, but the company's results were bolstered by the performance of Fort Worth-based Bell Helicopter.

The $48 million quarterly loss, or 17 cents a share, compared with a profit of $6 million, or 2 cents a share, a year ago. Cessna Aircraft Co., until recently Textron's largest subsidiary, continues to struggle with lagging demand for its business jets because of the economic downturn.

Textron's revenue for the quarter was $2.48 billion, down 3 percent from $2.55 billion a year ago. For the first nine months of the year, Textron's revenue is $7.4 billion, down 4 percent from $7.7 billion a year ago.

Bell was Textron's bright spot during the quarter, with revenue of $825 million, an increase of 31 percent from $628 million a year ago. The increase was largely due to increased deliveries of V-22 Osprey and H-1 military aircraft. Bell revenue is up 11 percent for the year, to $2.7 billion.

Bell delivered seven V-22s and five H-1 helicopters to the military during the quarter. "Performance on both programs continues to improve as we ramp up production," Scott Donnelly, Textron's CEO, said in a conference call with analysts. Bell delivered 24 civil helicopters during the quarter, including four of the new 429 model. But Donnelly said civil helicopter deliveries for the year would likely fall short of the announced target of 150.

"The overall outlook at Bell is strong in both the commercial and military businesses," Donnelly said.

Cessna, long Textron's premier subsidiary, has seen its revenue and profit plunge the last two years as orders and deliveries of business jets plummeted in the wake of the economic meltdown. Donnelly said Cessna's business, which had seen a mild uptick as recently as June, slowed again in the third quarter.

Cessna revenue for the quarter was $1.6 billion, down 35 percent from $2.5 billion a year ago. The company lost $31 million, compared with a $32 million profit in 2009.

Donnelly, speaking from the National Business Aviation Association trade show, said buyers of business jets and commercial helicopters "appear to be more optimistic and positive" than a year ago. This week, Cessna announced plans for a much-revised version of its Citation X premium business jet.

Over the last two years, Cessna has dramatically curtailed jet production and laid off thousands of workers.

Textron shares (ticker: TXT) closed Wednesday at $20.78, down 16 cents, after dropping below $20 in earlier trading.

Bob Cox, 817-390-7723