Textron Beats Street; Shares Spike 16%

Textron posts a better-than-expected bottom line amid a difficult quarter for business.
Publish date:

PROVIDENCE, R.I. (TheStreet) -- Textron (TXT) - Get Report, the manufacturing conglomerate that builds Bell helicopters and Cessna airplanes, suffered through a difficult second quarter -- but nonetheless offered enough positives in its report to steel investors Tuesday.

In brisk trading early in the session, Textron shares jumped almost 15% to $12.78 on volume of nearly 4 million shares.

The list of numbers describing Textron's woes was long, though the company did manage to beat Wall Street targets (adjusted earnings of 8 cents a share, excluding items, versus the 3-cent loss projected by analysts). But there were also the thousands of laid-off employees and the subsequent $129 million restructuring charge. Then there was the revenue decline of 29% from the year-earlier period, and the decline in Cessna's backlog of 37%.

And, in the latest turn, the company lowered its sales outlook for the rest of the year. The main culprit was the continued cratering of the small jet market. Textron said it will deliver even fewer such planes this year than it had been expecting.

Textron said 2009 revenue will now likely come in at $10.6 billion, down from the previous guidance of about $11 billion.

But the company nonetheless maintained its full-year earnings per share estimates. Though the range of that guidance is extremely wide -- between 33 cents and 63 cents -- it's above analysts' consensus targets of a 22-cent profit.

Another way to counteract the picture painted by the quarter's generally ugly numbers was to use words, which Textron did. Lewis Campbell, the company's chief executive, said in his prepared statement that "despite cancellations, we saw early signals of stabilization late in the quarter in the business jet market."

He didn't provide specific numbers to back up that claim, but investors evidently took heart.

Among other aircraft makers and defense contractors,


(BA) - Get Report

last week reported better-than-expected earnings.

Lockheed Martin

(LMT) - Get Report

, meanwhile, posted a revenue increase of 1.8% (though earnings retracted by 17%).

General Dynamics

(GD) - Get Report

is set to report Wednesday.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.