Textron (TXT, Financial), the manufacturer of Cessna business jets, reported first-quarter profits and revenues that exceeded expectations, driven by strong performance from its Bell division and robust demand for aftermarket parts and services in its aviation segment.
Defense contractors like Textron have benefited from increased ammunition demand and military project funding amid ongoing geopolitical tensions. CEO Scott Donnelly noted significant growth in Bell's military and commercial product lines. The Bell division, known for helicopters and tiltrotor aircraft, saw a 35% year-over-year revenue increase due to rising commercial aircraft demand and sales growth in U.S. Army projects and military maintenance.
Textron's aviation division, which produces Cessna and Beechcraft planes, experienced a 2% revenue growth in Q1. This was attributed to increased aftermarket demand, which offset a decline in aircraft deliveries. However, supply chain issues caused delivery delays, affecting profit margins. Last year's International Association of Machinists and Aerospace Workers (IAM) strike exacerbated production challenges, but Donnelly highlighted operational improvements as production levels recover.
Adjusted quarterly earnings per share were $1.28, surpassing analysts' average estimate of $1.12. Total Q1 revenue rose 5.5% to $3.31 billion, exceeding the expected $3.25 billion.
