It wasn't original, but it was impressive.

When defense contractor Textron (NYSE:TXT) reported its third-quarter 2006 results last week, it sang the same song it's sung all year now: great sales, great profits, and an objective of generating "free cash flow in the range of $550-$600 million" by year's end. Hitting the high notes, here's what the company had to report:

  • Quarterly revenues grew 18% year over year.
  • Diluted earnings per share were up 27% at $1.36.
  • Free cash flow from manufacturing operations (as opposed to finance) reached $410 million.
  • Earnings guidance upped to somewhere between $1.35 and $1.45 per share in Q4.
  • And free cash flow guidance held steady at $550 million to $600 million.

Getting down to the nitty-gritty, Textron highlighted two of its divisions as performing particularly well this quarter. Within Cessna, the firm reported that it received 100 new orders for business jets. Sixty-five of these will be delivered a few years out; 35 are to be delivered next year. As a result, a full three months from the end of fiscal year 2006, Textron has already filled out its entire planned allotment of 370 jets for fiscal 2007 delivery. In other words, chances are good that sales and profits at Cessna will be ahead of plan, assuming additional orders are placed in the current quarter.

Meanwhile, over at Bell (maker of not just the helicopter of the same name, but also the Osprey helicopter/airplane hybrid in flight, and the M1117 Armored Security Vehicle on the ground), Textron saw the strongest sales growth of all -- a 27% year-over-year improvement. Unfortunately, the firm was unable to capitalize on its sales success and turn in similar profits growth. Military vehicle profits appear to have done just fine, but the firm suffered a $36 million decline in operating profits from its commercial lines of business.

What about the telescope?
As for how long Textron can keep this up, the telescope remains clear, or at least to CEO Lewis Campbell. Once again, he made the bold assertion that there will be "strong end market demand [for Textron's products] through the rest of the decade." Considering the confidence of this multi-year prediction, and Campbell's record of calling things right, I'd say that pundits who have been predicting the imminent decline of defense industry spending might want to rethink themselves.

Don't stop there. Find out how Textron's defense-contracting peers did last quarter. We've covered:

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Fool contributor Rich Smith does not own shares of any company named above. The Fool has a disclosure policy.