Textron Inc. (NYSE:TXT) Q2 2019 Earnings Conference Call - Final Transcript

Jul 17, 2019 • 08:00 am ET


Textron Inc. (NYSE:TXT) Q2 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Textron Second Quarter Earnings Call. And at this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] And as a reminder, today's conference is being recorded.

I will now turn the call over to Vice President, Investor Relations, Eric Salander. Please go ahead, sir.

Eric Salander

Thanks, Kevin, and good morning, everyone. Before we begin, I'd 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 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 $3.2 billion, down $500 million from last year's second quarter. While net income was $0.93 per share, up from $0.87 per share last year. Manufacturing cash flow before pension contributions totaled $102 million compared to $399 million in last year's second quarter.

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

Scott C. Donnelly

Thanks, Eric, and good morning, everybody. Q2 was a solid quarter for Textron as we continue our focus on operational improvements across the company. Segment profit margin was up 120 basis points as we continue to see strong execution across our businesses, driven by higher margins at Aviation and Industrial. Bell revenues were down in the quarter, largely due to lower military volume as we transition to lower production quantities on our military programs.

On the commercial side, we delivered 53 helicopters, down from 57 last year. Despite the lower commercial deliveries in the quarter, we expect to see a ramp in deliveries in the second half of the year, supported by continued strong order activity and an increased production rates. In the quarter Japan's National Police Agency placed the first order for the Bell for 412epx, the newest upgrade of the 412 series. This aircraft has been co-developed between Bell and Subaru Corporation for the new utility [Phonetic] helicopter program under Japan's Ministry of Defense and we expect this program to support the 412 program well into the future.

Within Future Vertical Lift, we continue with the flight testing and demonstration activities of our Valor V-280. We have now demonstrated Army level one handling qualities successfully proving the aircrafts maneuverability [Indecipherable]. This represents the highest performance standards for agility, which is critical to the Army mission.

We're also encouraged by the Army's recent actions regarding the potential acceleration of the future long-range assault aircraft program. These actions include an industry days schedule at the end of this month that should allow potential contractors to gain more insight into the Army's acquisition approach, proposed alternative [Phonetic] procurement path through other transaction authority mechanism to be awarded in February. And identification of an engineering manufacturing development program or