Textron Inc. (NYSE:TXT) reported second-quarter results that exceeded earnings expectations on Tuesday, but investor sentiment weakened after the company maintained its full-year outlook while highlighting potential risks tied to government funding for a key defence programme.
Shares of the aerospace and defence manufacturer fell 2.01% in pre-market trading following the earnings release.
The company generated second-quarter revenue of $3.8 billion, in line with market expectations and up 3% from the same period a year earlier. Adjusted earnings per share came in at $1.62, surpassing analyst forecasts of $1.54.
Full-Year Outlook Includes MV-75 Cheyenne Funding Assumption
Textron reaffirmed its full-year 2026 adjusted earnings per share guidance of $6.40 to $6.60. The midpoint of $6.50 sits just below the consensus analyst estimate of $6.51.
The forecast, however, assumes the company will receive additional fiscal 2026 funding for the MV-75 Cheyenne programme.
If that funding is not secured, Textron said adjusted earnings per share could be reduced by between $0.20 and $0.30, while cash flow may decline by between $150 million and $250 million.
“The second quarter continued a strong start to the year for Textron with revenue growth in each of our manufacturing segments contributing to higher revenues of $500 million through the first half of the year,” said Textron CEO Lisa M. Atherton. “Bell continued to advance the MV-75 Cheyenne with the successful production of key long-lead parts and components.”
Mixed Performance Across Business Segments
Textron Aviation reported revenue of $1.5 billion, an increase of 1% year over year. Segment profit, however, declined 3% to $165 million as manufacturing inefficiencies and lower aircraft deliveries weighed on performance.
Bell recorded a 6% increase in revenue to $1.1 billion, supported by stronger military sales, although segment profit slipped 6% to $75 million.
Textron Systems delivered one of the strongest performances within the group, with revenue rising 7% to $347 million and segment profit increasing 10% to $44 million.
Cash Flow Declines as Share Buybacks Continue
Manufacturing cash flow before pension contributions totalled $154 million during the quarter, down from $336 million in the same period last year.
Textron returned $209 million to shareholders through share repurchases during the quarter. The company also confirmed that it has begun a sale process for its Industrial segment as it continues to streamline its portfolio.
Textron stock price
