Textron Increases Sales but Misses Estimates on Earnings

Textron (NYSE: TXT  ) reported earnings on Oct. 17. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 29 (Q3), Textron missed slightly on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share grew.

Gross margins dropped, operating margins increased, net margins were steady.

Revenue details
Textron logged revenue of $3.00 billion. The 11 analysts polled by S&P Capital IQ expected to see net sales of $3.06 billion on the same basis. GAAP reported sales were 6.6% higher than the prior-year quarter's $2.81 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.48. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.51 per share. GAAP EPS of $0.51 for Q3 were 8.5% higher than the prior-year quarter's $0.47 per share. (The prior-year quarter included $0.02 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 9.4%, 740 basis points worse than the prior-year quarter. Operating margin was 8.1%, 20 basis points better than the prior-year quarter. Net margin was 5.0%, about the same as the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $3.50 billion. On the bottom line, the average EPS estimate is $0.60.

Next year's average estimate for revenue is $12.40 billion. The average EPS estimate is $2.08.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 534 members out of 585 rating the stock outperform, and 51 members rating it underperform. Among 163 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 152 give Textron a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Textron is outperform, with an average price target of $31.07.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. TMFDisclosureHere


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