Textron Inc. Set to Report Q4 Earnings Amid Market Challenges
Analysts Anticipate Drop in Profits but Project Recovery Ahead
Textron Inc. (TXT), based in Providence, Rhode Island, is a well-known multi-industry company with strong involvement in aviation, defense, and industrial manufacturing. The company boasts a market cap of $14.2 billion and is recognized for its innovative products and services that cater to the evolving demands of clients worldwide. Textron is scheduled to announce its Q4 earnings before the markets open on Wednesday, January 22.
Leading up to the announcement, analysts predict Textron will show a profit of $1.31 per share, a decline of 18.1% from $1.60 in the same quarter last year. Out of the last four quarters, the company has missed consensus expectations in two instances while exceeding them on two other occasions.
In the most recent quarter, adjusted earnings were reported at $1.40 per share, falling short of the consensus estimate by 4.1%. Factors contributing to this earnings miss included disruptions in the supply chain and reduced profit margins.
Looking forward to fiscal 2024, analysts forecast that Textron will achieve earnings per share (EPS) of $5.45, marking a 2.5% decline from $5.59 in fiscal 2023. In 2025, however, EPS is anticipated to rebound, rising by 20.4% year-over-year to reach $6.56.
Over the past year, Textron’s shares have decreased by 5.8%, which is a significant contrast to the S&P 500 Index’s ($SPX) 23.7% growth and the Industrial Select Sector SPDR Fund’s (XLI) 16.4% increase during the same time frame.
Factors behind Textron’s underperformance include labor disruptions stemming from a four-week strike at Textron Aviation, which hindered aircraft deliveries and decreased operational efficiency. Following the announcement of disappointing Q3 earnings results on October 24, Textron shares fell by 6.2%. Revenue for Q3 stood at $3.43 billion, which did not meet Wall Street’s expectation of $3.51 billion, but represented a 2.5% increase compared to the previous year. The company has also lowered its 2024 manufacturing cash flow outlook, anticipating it to range between $650 million to $750 million, down from earlier estimates, while maintaining pension contributions at roughly $50 million.
Despite recent challenges, Wall Street remains cautiously optimistic about Textron. The stock currently holds a consensus “Moderate Buy” rating. Out of 13 analysts following the stock, seven recommend a “Strong Buy,” five advise a “Hold,” and one suggests a “Strong Sell.” The average price target for Textron is set at $97.46, indicating a potential upside of 28.6% based on current pricing.
On the date of publication, Rashmi Kumari did not hold any positions, either directly or indirectly, in any of the securities mentioned in this article. All information and data presented herein are intended solely for informational purposes. For additional details, please view the Barchart Disclosure Policy here. More news from Barchart
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