After it missed Wall Street estimates on both earnings and revenues yesterday, Textron (NYSE:TXT) investors bid up the shares nearly 6%. Was that the right call?

One word: No
To my mind, the investors who responded to yesterday's news with a buying frenzy made a big mistake. The problem, in a nutshell, is this: Some parts of the company are going great guns, other parts aren't ... and the ones that are, are starting to misfire.

Sales were up 14% year over year in Q3, but earnings declined 16%, for which you can blame two divisions: Industrial (a situation that Textron's already taking bold and, I would argue, successful steps to rectify), and Finance.

Right now, Finance poses the more serious problem. You may have noticed that we're in the midst of a bit of a financial sticky wicket here in the U.S. One that's already torpedoed Bank of America (NYSE:BAC) and Citigroup (NYSE:C) and put a dent in JP Morgan (NYSE:JPM). But the damage doesn't end there -- major industrial firms like GE (NYSE:GE) are feeling the pain as their financial arms get ripped from their sockets.

Likewise at Textron. Finance profits dropped 67% year over year. And that bad news is about to get worse. Things are so dire that analysts on the post-earnings conference call pressed management to sell the business -- a promise that CFO Ted French seemed noncommittal on, but did not categorically refuse. For the time being, though, management's only promising to "downsize" Textron Financial Corporation. In so doing, it will incur perhaps more than $170 million in asset impairment and restructuring charges during Q4, with the result that the company will not likely earn much more than $0.10 for the quarter.

Even the good news is bad
So that's what's wrong with Textron. Here's what's right: Aerospace. Cessna, Bell, and the Defense and Intel businesses are still turning in strong numbers. And with backlog up over an incredible 50% year over year, the good times seem destined to last a while longer.

Or not. During the conference call, Textron mentioned it was "working hard" to salvage its over-budget Armed Reconnaissance Helicopter program and "expect[ed] a decision soon." And it got it -- but not the decision it wanted.

By day's end, the Pentagon announced it will shut down the ARH program. This is good news for Boeing (NYSE:BA) and United Tech (NYSE:UTX), who may now rebid to build a replacement for the Army's Kiowa choppers. But this deprives Textron of billions of dollars of future revenues, and endangers one of the few divisions where the company was still doing well.

For further Foolishness on Textron, read:

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.