Sign in

You're signed outSign in or to get full access.

TI

TEXTRON INC (TXT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered adjusted EPS of $1.28 and GAAP EPS of $1.13 on $3.306B revenue; Bell drove the quarter with broad-based strength across military (FLRAA, sustainment) and commercial helicopters while Aviation operations improved toward pre-strike performance levels .
  • Results were modest beats versus consensus: revenue $3.306B vs $3.255B est; EBITDA $358M vs $355M est; adjusted EPS $1.28 vs $1.14 est; GAAP EPS roughly in line at $1.13; the beat was led by Bell volume/mix and Aviation aftermarket growth, partially offset by Aviation mix and lower Industrial volumes (Values retrieved from S&P Global)* .
  • 2025 guidance reaffirmed: GAAP EPS $5.19–$5.39; adjusted EPS $6.00–$6.20; net cash from ops (manufacturing group) $1.2–$1.3B; manufacturing cash flow before pension $800–$900M; tax rate ~18% (adjusted), corporate expense ~$160M; interest expense trending up slightly through the year .
  • Strategic actions: Powersports business (Arctic Cat) was sold on April 23; Q1 buybacks of $215M; Aviation factory recovery and supply chain/labor stability underpin expected margin improvement in H2, making Bell strength and Aviation ramp catalysts for stock narrative .

What Went Well and What Went Wrong

  • What Went Well

    • Bell posted strong growth: revenues up $256M YoY to $983M, with military +$154M (FLRAA and sustainment) and commercial +$102M; segment profit +$10M to $90M; 29 commercial helicopters delivered vs 18 LY; backlog $7.1B .
    • Aviation operations improving; aftermarket revenue +$27M YoY with 6% growth; production ramp underway, productivity/attrition metrics recovering toward pre-strike levels, supporting H2 margin uplift .
    • Guidance confidence: Management reaffirmed full-year EPS and cash flow ranges; CFO cited an adjusted tax rate of ~18% for FY25; corporate expense guidance maintained at $160M; share repurchases of $215M in Q1 .

  • What Went Wrong

    • Aviation profit fell $16M YoY to $127M on aircraft mix (31 jets vs 36 LY; turboprops 30 vs 20 LY), partially offset by stronger aftermarket volume; segment backlog $7.9B still solid .
    • Industrial segment revenue down $100M YoY (Specialized Vehicles -$62M; Kautex -$38M), reflecting lower volume/mix; segment profit flat at $30M, aided by restructuring cost reductions .
    • Cash usage: manufacturing cash flow before pension contributions was a use of $158M (vs $81M LY), driven by inventory build at Aviation and timing of Bell program receipts moving to Q2; net cash used from manufacturing ops of $114M .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$3.415* (Values retrieved from S&P Global)$3.613 $3.306
GAAP Diluted EPS ($)$1.18* (Values retrieved from S&P Global)$0.76 $1.13
Adjusted Diluted EPS ($)$1.40 $1.34 $1.28
EBITDA ($USD Millions)$373* (Values retrieved from S&P Global)$346* (Values retrieved from S&P Global)$358* (Values retrieved from S&P Global)
EBITDA Margin (%)10.88%* (Values retrieved from S&P Global)9.58%* (Values retrieved from S&P Global)10.83%* (Values retrieved from S&P Global)
EBIT ($USD Millions)$272* (Values retrieved from S&P Global)$243* (Values retrieved from S&P Global)$266* (Values retrieved from S&P Global)
EBIT Margin (%)7.94%* (Values retrieved from S&P Global)6.73%* (Values retrieved from S&P Global)8.05%* (Values retrieved from S&P Global)

Segment breakdown (Revenue and Segment Profit):

SegmentQ1 2024 Revenue ($MM)Q1 2025 Revenue ($MM)Q1 2024 Segment Profit ($MM)Q1 2025 Segment Profit ($MM)
Textron Aviation$1,188 $1,212 $143 $127
Bell$727 $983 $80 $90
Textron Systems$306 $296 $38 $40
Industrial$892 $792 $29 $30
eAviation$7 $7 $(18) $(17)
Finance$15 $16 $18 $10
Total$3,135 $3,306 $290 $280

KPIs and Backlog:

KPIQ1 2024Q4 2024Q1 2025
Aviation jets delivered36 32 31
Aviation commercial turboprops delivered20 38 30
Bell commercial helicopters delivered18 78 29
Aviation backlog ($B)—$7.8 $7.9
Bell backlog ($B)—$7.5 $7.1
Systems backlog ($B)—$2.6 $2.3

Non-GAAP adjustments (Q1 2025):

ItemQ1 2024Q1 2025
LIFO inventory provision (pre-tax)$20MM $29MM
Intangible amortization (pre-tax)$8MM $8MM
Special charges (pre-tax)$14MM —
Adjusted EPS$1.20 $1.28

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP EPSFY 2025$5.19–$5.39 $5.19–$5.39 Maintained
Adjusted EPSFY 2025$6.00–$6.20 $6.00–$6.20 Maintained
RevenueFY 2025≈$14.7B ≈$14.7B Maintained
Net cash from ops (manufacturing group)FY 2025$1.2–$1.3B $1.2–$1.3B Maintained
Manufacturing cash flow before pensionFY 2025$800–$900MM $800–$900MM Maintained
Pension contributionsFY 2025≈$50MM ≈$50MM Maintained
Adjusted effective tax rateFY 2025~17.5% (Q3 commentary) ~18% Raised vs late-2024 commentary
Corporate expenseFY 2025$135MM (Q3 commentary) ~$160MM (normalize through year) Higher reset maintained
Net interest expenseFY 2025~$85MM (Q3 commentary) Trending up slightly through the year Upward trend
DividendNext payable—$0.02 per share payable July 1, 2025 Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Aviation supply chain & labor productivityStrike impact; proactive supplier engagement; inventory build to stabilize flow Backlog strong; plan for 2025 revenue growth post-strike Metrics trending back to pre-strike; lower attrition; cleaner part flow; H2 margin uplift expected Improving
Bell FLRAA programMilestone B achieved; EMD phase; backlog +$2.3B ~$900MM FLRAA revenue in 2024; expected increase next year FLRAA driving military revenue; YoY program growth ~20% expected; margins consistent Growth with lower-margin mix
Business jet demand>$1B orders; strong demand across refreshed Gen3 portfolio Expect healthy revenue growth in 2025 above original ’24 guide Demand “solid”; book-to-bill healthy; backlog supports delivery windows 18–24 months Stable/constructive
Tariffs/macro—European auto softness affecting Kautex Tariffs impact minimal due to USMCA/localized production; monitoring supplier parts in Europe/Asia Manageable
Unmanned/autonomous & defense techSystems milestones (FTUAS, RCV prototypes); Navy Aerosonde ops expansion Programs critical to Systems’ growth profile Autonomy across platforms (incl. FLRAA); classified/IRAD work incl. “Tsunami”; sustained H-1/V-22 sustainment Expanding focus
eAviation & electrificationNuuva/Nexus testing trajectory —Supporting electrified Caravan via partners/STCs; potential production incorporation with sufficient demand Option-value building
Product certificationGen3 light jets unveiled; program updates —GE Catalyst turboprop engine certified; Denali certification work re-queued; performance strong Progressing

Management Commentary

  • “In the quarter, we saw strong growth in both military and commercial product lines at Bell. At Aviation, operations continued to improve as the factory progressed toward pre-strike performance levels while ramping production.” — Scott C. Donnelly .
  • Segments: Aviation +$24M YoY revenue (aftermarket +$27M), profit $127M (-$16M YoY) on mix; Bell revenue $983M (+$256M YoY), profit $90M (+$10M YoY); Systems revenue $296M (-$10M YoY), profit $40M (+$2M); Industrial revenue $792M (-$100M YoY), profit $30M (flat) .
  • CFO: Adjusted effective tax rate ~15.3% in Q1; full-year expected ~18%; corporate expenses $43M; manufacturing cash flow before pension contributions use of $158M; reaffirmed adjusted EPS $6.00–$6.20 and manufacturing cash flow before pension $800–$900M .
  • Strategic: Sale of Powersports business (Arctic Cat) closed April 23; Q1 buybacks $215M .

Q&A Highlights

  • Tariffs exposure assessed as de minimis due to USMCA compliance and localized production; supply chain parts in Europe/Asia monitored but impact minimal .
  • Bell outlook: FLRAA year-over-year revenue likely up ~20% with margins roughly consistent; strong commercial deliveries expected to continue .
  • Aviation demand and production: Backlog supports 18–24 month delivery windows; ramp to recover through year; productivity/efficiency metrics back to pre-strike levels exiting Q1 .
  • Cash flow timing: Larger use from “Other” driven by Aviation inventory build and Bell payment timing shifting to Q2 .
  • Unmanned/autonomy: Capability embedded across programs (incl. Bell platforms); classified/IRAD initiatives; sustained legacy platform aftermarket demand (H-1, V-22) .
  • eAviation strategy: Partner-supported electrified Caravan via STCs with option to integrate into production upon sufficient demand .
  • Denali program update: Engine certification achieved; aircraft-level certification work re-queued; flight performance “very, very good” .

Estimates Context

  • Q1 2025: Adjusted EPS $1.28 vs $1.14 consensus; revenue $3.306B vs $3.255B consensus; EBITDA $358M vs $355M consensus; GAAP EPS $1.13 roughly in line (Values retrieved from S&P Global)* .
  • Q4 2024: Adjusted EPS $1.34 vs $1.25 consensus; revenue $3.613B vs $3.817B consensus; EBITDA $346M vs $394M consensus (Values retrieved from S&P Global)* .
  • FY 2025: Consensus EPS ~$6.11 (Values retrieved from S&P Global)*. Implication: modest upward pressure on estimates likely for Bell-driven revenue/EBITDA; Aviation margins hinge on H2 productivity and mix.

Estimates vs Actuals (selected periods):

MetricQ1 2024Q4 2024Q1 2025
Primary EPS Consensus Mean ($)1.23* (Values retrieved from S&P Global)1.25* (Values retrieved from S&P Global)1.14* (Values retrieved from S&P Global)
Primary EPS Actual ($)1.20 1.34 1.28
Revenue Consensus Mean ($MM)3,267* (Values retrieved from S&P Global)3,817* (Values retrieved from S&P Global)3,255* (Values retrieved from S&P Global)
Revenue Actual ($MM)3,135 3,613 3,306
EBITDA Consensus Mean ($MM)368* (Values retrieved from S&P Global)394* (Values retrieved from S&P Global)355* (Values retrieved from S&P Global)
EBITDA Actual ($MM)354* (Values retrieved from S&P Global)346* (Values retrieved from S&P Global)358* (Values retrieved from S&P Global)
# of EPS Estimates14* (Values retrieved from S&P Global)12* (Values retrieved from S&P Global)13* (Values retrieved from S&P Global)
# of Revenue Estimates13* (Values retrieved from S&P Global)11* (Values retrieved from S&P Global)13* (Values retrieved from S&P Global)

Key Takeaways for Investors

  • Bell is the near-term growth engine, with FLRAA and sustainment activity plus commercial helicopter deliveries broadening; expect continued revenue expansion albeit at a lower margin mix, supporting overall EBIT dollar growth .
  • Aviation recovery is progressing; backlog and supply chain/labor stability underpin an H2 margin inflection as factory productivity normalizes—watch for sequential margin improvement and mix normalization in jets vs turboprops .
  • Industrial headwinds persist; restructuring offsets volume/mix pressure—monitor Specialized Vehicles demand and any incremental cost actions; Powersports divestiture trims revenue but reduces complexity .
  • Cash flow seasonality matters: Q1 cash use reflects inventory build and timing; receipts expected in Q2—focus on full-year manufacturing cash flow before pension guidance ($800–$900M) and trajectory vs last year .
  • Guidance credibility reinforced: EPS and cash flow ranges reaffirmed; adjusted tax rate ~18%, corporate expense trajectory ~$160M, interest expense creeping up—supporting stable full-year framing .
  • Structural narrative: Autonomy across platforms and electrification options (eAviation/Caravan STCs) expand optionality, while certification milestones (Catalyst engine, Denali progress) bolster future product cadence .
  • Trading setup: The combination of Bell upside and Aviation H2 margin recovery can sustain estimate momentum; near-term volatility may be tied to program timing and Aviation mix, but beat/miss cadence leaned positive this quarter (Values retrieved from S&P Global)* .

S&P Global disclaimer: All values marked with an asterisk are retrieved from S&P Global.