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Textron Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: TXT

So despite a difficult DoD environment, over the past several months, we've won several significant new programs that help solidify the long-term outlook and systems.

Moving to our Finance segment. We had another successful quarter of liquidations as we reduced noncap to financial receivables by another $160 million, including a $70 million reduction in our Golf Mortgage portfolio, representing 19 loans. Our noncap to finance receivable portfolio now stands at $619 million.

Shifting to our industrial business, operating performance was solid with revenues up 5%. Volumes in our Industrial businesses reflect strength in the North American and Asian auto markets offsetting European softness.

Moving over to Cessna, we delivered 49 jets in the quarter, up from last year's 38, reflecting modest recovery and our success in the current market. We also had a number of strategic developments over the past several months at Cessna. First, we announced our new long-range super midsize Longitude business jet during the eBay show in Geneva. With a 4,000-nautical mile range and a speed of Mach .86, the Longitude will be designed to make nonstop flight between city pairs like New York and Paris; London to Dubai; or Beijing, Moscow. At a price of just under $26 million, we believe the Longitude will be the best valued 4,000-nautical miles super midsized business jet available in the world. We also continue to make good progress during the quarter with flight testing on our new Citation M2 and Citation Ten.

Finally, our newly announced Latitude was selected by NetJets to become part of their fractional fleet offering, which should add significantly to the long-term demand for this aircraft.

And to wrap up with Bell, on the military side, we delivered 9 V-22s and 6 H-1s versus 9 22s and 8 H-1s in last year's second quarter. We saw a significant increase in our commercial business with 47 units delivered in the second quarter, up to 25 from last year's 22 deliveries. This growth reflects the overall strength in global helicopter markets, as well as the ramp-up in our 429 program and the success of our new 407GX.

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