The 10-second takeaway
For the quarter ended June 30 (Q2), Textron beat slightly on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share improved significantly.
Gross margins contracted, operating margins expanded, net margins expanded.
Textron booked revenue of $3.02 billion. The 10 analysts polled by S&P Capital IQ expected to see net sales of $2.98 billion on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $2.73 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.58. The 13 earnings estimates compiled by S&P Capital IQ averaged $0.44 per share. GAAP EPS of $0.58 for Q2 were 107% higher than the prior-year quarter's $0.28 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 10.3%, 690 basis points worse than the prior-year quarter. Operating margin was 9.6%, 330 basis points better than the prior-year quarter. Net margin was 5.7%, 240 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $3.08 billion. On the bottom line, the average EPS estimate is $0.50.
Next year's average estimate for revenue is $12.41 billion. The average EPS estimate is $2.02.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 529 members out of 579 rating the stock outperform, and 50 members rating it underperform. Among 157 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 148 give Textron a green thumbs-up, and nine 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 $30.50.
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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. The Motley Fool owns shares of Textron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.