Textron Inc. (NYSE:TXT) Q1 2019 Earnings Conference Call Transcript

Apr 17, 2019 • 08:00 am ET

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Textron Inc. (NYSE:TXT) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Textron First Quarter Earnings Conference Call. At this time, all participants are in listen only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, today's conference is being recorded.

Executive
Eric Salander

Thanks, Brad, and good morning, everyone.

Before we begin, I would like to mention, we will be discussing future estimates and expectations during our call today. These forward looking statements are subject to various risk factors, which are detailed in our SEC filings and also in today's press release.

On the call today, we have Scott C. Donnelly, Textron's Chairman and CEO, and Frank Connor, our Chief Financial Officer. Our earnings call presentation can be found in the Investor Relations section of our website.

Textron's revenues in the quarter were $3.1 billion, down $187 million from last year's first quarter, largely driven by the impact of the Tools and Test disposition in the prior year. Net income was $0.76 per share, up from $0.72 per share in last year's first quarter. Manufacturing cash flow before pension contributions reflected a use of cash of $291 million compared to a use of cash of about $158 million in last year's first quarter.

With that, I will turn the call over to Scott.

Executive
Scott C. Donnelly

Thanks, Eric and good morning, everybody. Q1 was a strong quarter for Textron. Margins were up 100 basis points in the quarter, driven by strong execution in Aviation and Bell, as well as improved performance in Specialized Vehicles. At Bell, revenues were slightly lower due to commercial volume in the quarter, where we delivered 30 helicopters, down from 46 last year.

We saw solid order activity in the quarter, with multi-aircraft orders across all our commercial models and we expect to ramp commercial deliveries throughout the balance of the year. In the quarter, we achieved certification of the 407GXi from the Civil Aviation Administration of China, which allowed us to deliver the first unit to Shaanxi as part of their effort to establish a medical services and public safety network in China.

On the military side, the Bell Boeing Program Office was awarded a $143 million contract for additional performance-based logistics and engineering support on the V-22, with options for four additional years. With more than 375 V-22 aircraft accumulating in excess of 450,000 flight hours to-date, we expect to see continued opportunities to strengthen our military aftermarket business from the V-22 fleet. The V-22 recently celebrated the 30th anniversary of its first flight demonstrating the reliability of tiltrotor technology and the variety of missions capabilities for the most in-demand aircraft in the US military.

And we're continuing our tiltrotor innovation with the V-280, which recently achieved a cruising speed of 300 knots, as part of its continued successful flight test program. We believe that the success of the V-280 to-date has helped accelerate interest in the future long range assault aircraft program due to the Army's request for information which will initiate a competitive acquisition