Textron Sees Profits and Backlog Grow, Despite Revenue Dip

Textron Aviation saw modest declines in revenues in the fourth quarter and recently reported that these totaled $1.5 billion, representing a decrease of $58 million compared with the same period in 2022. The company attributed this reduction to a lower volume and mix of aircraft deliveries but said that a rise in pricing partially offset the decline. The division's revenue in Q3 2023 was slightly lower, at $1.3 billion, and the U.S. manufacturer provided an optimistic outlook for 2024, indicating expectations for continued growth and expansion in aerospace.

The company delivered 50 jets and 44 civil turboprops in the fourth quarter, marking a slight decrease from 52 jets and 47 turboprops in the same period in 2022. It reported that profits reached $193 million in the fourth quarter, up $23 million from a year ago.

Textron Aviation's revenues in 2023 totaled about $5.37 billion, up from roughly $5.07 billion in 2022. The segment recorded $649 million in profit for 2023—about $90 million more than in 2022.

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The total number of jets delivered in 2023 was 168, down from 178 in 2022. For 2023, aircraft deliveries included 25 M2 Gen2s, 30 Citation CJ3+ aircraft, 31 CJ4 Gen2s, 17 Citation XLS+ Gen2s, 41 Citation Latitudes, and 24 Citation Longitudes. The airframer delivered 79 Caravans and 18 SkyCouriers in 2023, as well as 31 King Air 260s and 25 King Air 360s. 

“While we ended the year with an expectation of a book-to-bill 1:1, solid order flow and customer demand across our product portfolio resulted in a year-end backlog of $7.2 billion, an increase of $782 million,” Scott Donnelly, chairman, president, and CEO of Textron, remarked during the company’s earnings call.

By the end of last year, “manufacturing performance was trending positively with improvements in labor productivity and supplier deliveries,” he commented.

In 2023, the company’s aviation segment enjoyed robust performance, with the division reporting full-year income from continuing operations of $4.57 per share, an increase from $4.01 in 2022. Adjusted for specific factors, the income for 2023 stands at $5.59 per share, up from $4.45 in the previous year.

Electric aircraft developer Pipistrel, acquired by Textron in 2022, delivered 135 aircraft during 2023, up from 61 in 2022. Donnelly noted, “The Pipistrel Velis Electro was selected to participate for a trial period to explore operational and training uses for this all-electric aircraft as part of Agility Prime, the Air Force's vertical lift program.”

The Textron eAviation segment, which is working on electric aircraft, reported revenues of $10 million for the fourth quarter but incurred a loss of $23 million. According to Textron’s CFO, Frank Connor, this “reflected the research and development costs for the initiatives related to the development of sustainable aviation solutions.”

The company introduced new models in the Cessna Citation series in 2023 and made significant agreements with companies like NetJets, highlighting Textron Aviation's commitment to expanding its product portfolio and market presence.

Textron announced the new Cessna Citation Ascend last year and unveiled the Cessna Citation CJ3 Gen2 in October. “In the third quarter, Textron Aviation announced a new fleet agreement with NetJets for up to 1,500 aircraft over 15 years, including Longitude, Latitude, and the newly announced Ascend,” Donnelly said.

“Some of the new products coming out, like CJ3 Gen2, [have] been really well received,” he added. “Ascend, I think, will start to also drive strong demand. Overall, the product lineup is in good shape.”

Looking ahead to 2024, Textron projects revenues of approximately $14.6 billion, a significant increase from $13.7 billion in 2023. Textron's growth strategy emphasizes ongoing investments in new products and programs, aimed at driving long-term shareholder value and organic growth. 

“I think we'll continue to see a ramp on the production side,” Donnelly said in response to a question about deliveries and book-to-bill in 2024. “I certainly see unit deliveries being up on a year-over-year basis. The market is still strong. Obviously, our book-to-bill covers 2024 deliveries quite well, but our expectation coming into the year was targeting a 1:1 book-to-bill. We did better than that in 2023.”