John Godyn

John Godyn asked for insights into the factors that could lead to SkyWest's 2026 EPS guidance of mid-$11 potentially reaching $12, focusing on operating leverage. He also inquired about the company's strategy for balance sheet deployment, including potential changes in attitude toward share buybacks or other capital allocation opportunities.

Answer

Rob Simmons, CFO, noted strong demand in prorate and contract segments, contributing to the updated guidance. Wade Steel, Chief Commercial Officer, identified increased utilization, the return to service of parked aircraft, and prorate demand as key drivers for production and profitability. Rob Simmons stated that SkyWest is in an 'all of the above' position regarding capital allocation, able to invest in the fleet, delever the balance sheet, and continue share repurchases, given its strong free cash flow generation and balance sheet strength.

John Godyn asked for insights into what factors could drive SkyWest's 2026 EPS guidance higher than the mid-$11 area and how the company plans to strategically deploy its balance sheet, including potential changes to its approach to share buybacks or other capital allocation opportunities.

Answer

Rob Simmons, CFO, noted that strong demand in prorate and contract, along with increased utilization and the return of parked aircraft, could lead to upside in EPS. He emphasized an 'all of the above' capital allocation strategy, leveraging strong free cash flow for fleet investment, deleveraging, and share repurchases, given the company's strong balance sheet and liquidity.

John Godyn asked about Textron's points of upside leverage within Bell and Systems in a scenario with a significantly higher defense budget. He also inquired if a higher budget would guide adding capabilities and accelerating growth in high-quality aerospace and defense areas, particularly space.

Answer

CEO Lisa Atherton identified several areas of leverage: the Sentinel program and hypersonics at Systems, the XM-30 and Marine Corps Armed Reconnaissance Vehicle programs, and the continued push for full-rate production of the MV-75. She also highlighted the steady Ship-to-Shore Connector program. She confirmed that a higher budget would guide adding capabilities, particularly in space defense, which she sees as a key growth area for future focus.

John Godyn asked about Textron's potential points of leverage in its defense portfolio in a higher budget environment and how a larger budget might influence adding new capabilities.

Answer

Lisa Atherton, CEO of Textron, identified several areas of leverage: the Sentinel program (hypersonics, thermal protective materials), the XM30 and Marine Corps Armed Reconnaissance Vehicle programs, and the accelerated MV-75 program moving quickly to full-rate production. She also mentioned the steady Ship-to-Shore Connector program. Atherton added that a higher budget could guide Textron to explore new growth areas, particularly in the space side of defense, either through existing assets or future acquisitions.

John Godyn inquired about the quarterly cadence of organic growth, seeking to reconcile the expected acceleration throughout 2026 with a strong Q4 2025. He also asked if the company would exit 2026 with significant momentum, leading to a substantial step-up in 2027.

Answer

Kathy Warden, Chair, CEO, and President of Northrop Grumman, explained that the expected cadence is due to a strong Q4 2025 (partially material timing) and fewer working days in Q1 2026. She confirmed that the backlog growth from 2025, especially in the space business, will ramp up in the second half of 2026, carrying momentum into 2027 across the portfolio.

John Godyn inquired about the quarterly cadence of organic growth, specifically how the projected acceleration throughout 2026 squares with a strong Q4 2025, and if the company expects to exit 2026 with significant momentum leading to a substantial step-up in 2027.

Answer

Chair, CEO, and President Kathy Warden explained that the Q4 2025 strength was partly due to material timing, and Q1 2026 has fewer working days, leading to a similar growth profile as 2025. She confirmed that the backlog growth from 2025, particularly in the space business, is expected to ramp up in the second half of 2026, carrying significant momentum into 2027 across the portfolio.

John Godyn questioned American Airlines' full-year guidance, asking if it incorporates the strong booking trends observed early in the year and under what conditions the high end of the guidance range could be achieved. He also sought clarification on competitor claims regarding American Airlines' profitability in the Chicago hub.

Answer

CFO Devon May stated that the full-year guidance does not fully assume current strong booking trends will persist, suggesting that sustained strong bookings could lead to results closer to the high end of the guide. CEO Robert Isom affirmed that Chicago is expected to return to its pre-pandemic profitability levels, emphasizing the company's commitment to its team members, customers, and the community.

John Godyn asked for clarification on American Airlines' full-year guidance for 2026, particularly regarding potential conservatism given strong early-year bookings, and addressed competitor claims about Chicago hub profitability.

Answer

CFO Devon May indicated that the full-year guidance could prove conservative if current booking trends persist, especially given the Q1 forecast uncertainty due to Winter Storm Fern. CEO Robert Isom refuted claims about Chicago's unprofitability, emphasizing plans to restore it to mid-level profitability and the benefits of competition for customers.

John Godyn asked how Booz Allen Hamilton strategically prepares for the possibility of a significantly larger defense budget, such as a $1.5 trillion budget, and how such potential growth influences the company's investment decisions and strategic thinking.

Answer

Chairman, CEO, and President Horacio Rozanski stated that Booz Allen has been preparing to support defense priorities, including recapitalizing the industrial base and integrating new technology for warfighters. He highlighted investments in growth vectors like cyber, AI, national security (space, border), and defense technology, leveraging commercial partners to bring solutions quickly, and building agility into their management motion to respond to dynamic funding environments.

John Godyn asked about the commercial aftermarket backdrop, inquiring if the strong momentum from Q4 2025 has continued into the new year and if there's potential to exceed the mid-teens services growth guidance for 2026.

Answer

Chairman and CEO Larry Culp stated that momentum continues with no pause, supported by a $190 billion backlog and increased LEAP cycle share. CFO Rahul Ghai added that spare parts delinquency was up 50% year-over-year, driven by narrowbody and LEAP external channel growth, with CFM56 retirements trending better at 2% for 2026, supporting 2,300-2,400 CFM shop visits through 2028.

John Godyn inquired about the commercial aftermarket backdrop, current momentum, and the underlying assumptions for the mid-teens services growth guidance in 2026, asking if there's potential to outperform if recent momentum continues.

Answer

Chairman and CEO Larry Culp noted continued tailwinds, strong backlog, and increased LEAP cycles, emphasizing that demand is robust but material availability and efficient shop visit execution are key. CFO Rahul Ghai added that both shop visits and spare parts are expected to grow mid-teens, with spare parts delinquency up 50% year-over-year, driven by narrow body and LEAP external channel growth. CFM56 retirements are trending better at a 2% range, supporting 2,300-2,400 shop visits through 2028.