Textron Shares Fall Despite Earnings And Revenue Beat In Q2: What You Need To Know

Shares of Textron Inc. (NYSE:TXT) are trading lower on Thursday despite the company posting stronger-than-expected second-quarter results.

What To Know: Textron reported adjusted earnings of $1.55 per share for the second quarter, slightly above the consensus estimate of $1.43 and marginally higher than the $1.54 reported a year ago. Revenue came in at $3.72 billion, beating expectations of $3.62 billion and marking a 5.4% increase year-over-year. The company attributed the growth to higher revenues in its commercial aircraft, helicopter, and military businesses, particularly the U.S. Army's MV-75 program under Bell.

Despite topline growth and a reaffirmed full-year earnings outlook, the company saw profitability declines in several key divisions. Textron Aviation posted lower segment profit due to aircraft mix and higher warranty costs, even as jet deliveries rose to 49 from 42 a year earlier. Bell also recorded a drop in segment profit due to increased research and development spending.

Textron Systems and Industrial segments showed modest improvements in profitability, driven by reduced expenses and the impact of recent restructuring. Cash flow from operations in the manufacturing group totaled $395 million, up slightly from last year. The company raised its full-year manufacturing cash flow outlook to a range of $900 million to $1.0 billion, citing stronger-than-expected performance. Textron also returned $214 million to shareholders during the quarter through share repurchases.

While the results exceeded analyst estimates, the stock's decline suggests investors were looking for more positive momentum or are concerned about profitability trends in key segments. Textron affirmed its full-year adjusted EPS guidance of $6.00 to $6.20 and GAAP EPS guidance of $5.19 to $5.39, in line with consensus estimates.

TXT Price Action: Textron shares were down 5.2% at $82.65 at the time of writing, according benzinga Pro.

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