PROVIDENCE, R.I. (TheStreet) -- Textron shares jumped by as much as 8% Tuesday after the conglomerate ended a string of ugly quarters by posting an unexpected profit and adjusting its financial guidance in a positive direction.
On the surface, though, Textron's statement remained an ugly thing to look at, with its bottom line (including charges) cratering by some 98%, revenue declining 27% from a year ago, and the order backlog in its biggest unit, business-jet maker Cessna, falling by about $1.3 billion compared with the same period in 2008.
But the company also tweaked its outlook for the fourth quarter, saying that it will likely post full-year earnings "at the upper end of its guidance range," which had pegged a bottom line, excluding items, of 33 cents to 63 cents a share. So wide is that range that any move to its upper end evidently gave investors reason to cheer.
Also possibly adding to the company's stock-price advance Tuesday: With 7.5% of the company's float in the hand of short sellers, the positive guidance may have induced a short squeeze.
Late in Tuesday's session, Textron shares were changing hands at $19.74, up $1.38, or 7.5%. Volume reached more than 12 million shares, nearly double the daily average turnover in the name.
In its press release announcing quarterly results, Textron also said that is revenue target for the year is $10.6 billion and that its manufacturing units will likely generate free cash flow of $300 million to $400 million.
Echoing executives across corporate America this earnings season, Textron CEO-elect Scott Donnelly said in a prepared statement, "The demand environment for our commercial products continues to show signs of stabilization, but we believe that market recovery likely will be slow and modest."
As for the third quarter, excluding restructuring charges, Textron said its per-share earning whould have totaled 12 cents, better than analysts' estimates of a 3-cent loss. The company's quarterly revenue of $2.55 billion met the consensus target.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.