Textron Inc. (TXT - Get Report) tumbled on Thursday, Oct. 18, shedding about two-thirds of its year-to-date gains, after the aerospace and defense company missed on third-quarter earnings and revenue estimates and issued a downbeat forecast.

Providence, R.I.-based Textron reported income from continuing operations of $2.26 a share. Adjusted earnings of 61 cents a share fell short of estimates of 76 cents. Revenue of $3.2 billion also missed analysts' forecasts that called for revenue of $3.5 billion.

"Revenues were lower in the quarter, largely reflecting declines at Industrial and Textron Systems," Textron Chairman and CEO Scott Donnelly said in a statement.

The maker of Cessna small planes and Bell helicopters narrowed its full-year adjusted earnings guidance to between $3.20 to $3.30 a share, which is below the consensus estimate of $3.33, according to FactSet. Textron reaffirmed full-year cash flow guidance of $750 million to $850 million.

Shares of Textron fell 11.3% to $57.48, cutting the stock's gain on the year to about 1.6%.

"They aren't saying it's a demand problem, they are saying that there are certain execution issues," TheStreet Jim Cramer said on CNBC. "They are willing to take action to reduce or sell the divisions that are necessary, so I don't think it's an opportunity to sell, I'm also not saying it's an opportunity to buy because they have been doing quite well ... But it's sloppy."

While Cramer called Textron's quarterly results sloppy, he did note that it doesn't include the "gigantic NetJets order" for more than 300 planes.   

Textron is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells TXT? Learn more now.

JPMorgan analyst Seth Seifman noted that the key element driving Textron's earnings miss was the industrial business. Otherwise, Seifman said, the third quarter was largely in line with expectations and even saw a pickup in aviation backlog.

"Industrial has struggled [year to date], and Textron announced a management change there on Friday; so, the miss is not out of nowhere, though the magnitude is surprising," Seifman wrote in a research note on Thursday. "We will be looking for more information from management regarding how industrial got so far off track this year, presumably in vehicles, and how Textron plans to bring the business to sustained profitability."

Donnelly told analysts on the earnings conference call that he expects the industrial team to improve in the final quarter of the year, noting that the "third quarter [for the auto market] is always the weakest of the year just because you have all the summer shutdown. So clearly, we will expect that business also to perform stronger in the fourth quarter."

"We think Industrial will improve with Scott Ernest at the helm and are willing to give it another quarter as we do not believe this to be a management team that will let underperformance go unchecked," Cramer wrote in a note to AAP subscribers.  

"All in, the quarter disappointed, however, we have reason to believe that the results will improve in coming quarters," Cramer and the AAP team wrote. "With backlogs in Aviation and Bell at multi-year highs, the NetJets deal not yet included in the numbers, and margins heading in the right direction, we believe the set up serves to support our longer-term thesis, which we reiterate is heavily based on a rebound in business jets (Aviation), which is further supported by the NetJets deal, and military spending (Bell), which we did see benefit Bell in this release."