Textron Aviation’s Q3 2024 Results Hit by Strike Impact
Textron Aviation’s third-quarter 2024 financial report reveals a significant impact from a recent four-week labor strike in Wichita, affecting production schedules and aircraft deliveries. The strike, which concluded with a new five-year contract ratified by Textron’s bargaining unit employees, led to reduced revenues and adjusted earnings for the quarter.
Textron Chairman and CEO Scott C. Donnelly noted in the October 24, 2024, press release, “In the third quarter, Textron Aviation experienced a strike upon the expiration of its existing labor agreement with bargaining unit employees. This impacted production but was recently resolved with a new contract.” The labor disruption led to a revenue decline of approximately $50 million, alongside a $30 million drop in profit. Textron’s total revenue, however, remained relatively stable at $1.3 billion, as a $36 million rise in pricing offset much of the decrease in delivery volume.
In the third quarter of 2024, Textron Aviation delivered 41 jets, an increase from 39 jets in the same quarter last year. However, commercial turboprop deliveries dropped to 25 from 38 units. Segment profit totaled $128 million, a $32 million reduction year-over-year, primarily due to the lower delivery volume caused by the strike. Meanwhile, Textron Aviation’s order backlog climbed to $7.6 billion, marking a $162 million increase from the previous quarter, underscoring continued demand despite short-term disruptions.
The strike’s impact extended to Textron’s cash flow and earnings metrics. The company reported net cash of $208 million in Q3, down from $270 million at the same time in 2023. Manufacturing cash flow before pension contributions was $147 million, compared to $205 million last year. For earnings, Textron posted $1.18 per share from continuing operations, down from $1.35 in the same period last year, with adjusted earnings per share of $1.40, a slight decrease from $1.49.
Textron also highlighted shareholder returns, noting it has returned $215 million to shareholders through share repurchases in the third quarter alone. So far in 2024, Textron has repurchased shares totaling $890 million, reflecting the company’s commitment to delivering value to its investors despite operational challenges.
Due to the strike’s impact, Textron has revised its full-year earnings outlook. Adjusted earnings per share are now expected to range between $5.40 and $5.60, down from the prior estimate of $6.20 to $6.40. The forecast for cash flow from operations has also been adjusted to $650-$750 million, reduced from an earlier range of $900 million to $1 billion. Additionally, the company plans to allocate $50 million toward pension contributions.
While Textron’s third-quarter results reflect the challenges of recent labor disruptions, the company remains optimistic about future growth, backed by a strong backlog and ongoing demand for its aircraft. The recent contract settlement aims to stabilize Textron’s workforce and improve operational resilience, setting the stage for a recovery in the upcoming quarters.
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