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Aerospace and defense company Textron (NYSE:TXT) announced better-than-expected revenue in Q1 CY2025, with sales up 5.5% year on year to $3.31 billion. Its non-GAAP profit of $1.28 per share was 12.5% above analysts’ consensus estimates.

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Textron (TXT) Q1 CY2025 Highlights:

• Revenue: $3.31 billion vs analyst estimates of $3.23 billion (5.5% year-on-year growth, 2.3% beat)

• Adjusted EPS: $1.28 vs analyst estimates of $1.14 (12.5% beat)

• Adjusted EBITDA: $386 million vs analyst estimates of $354.6 million (11.7% margin, 8.9% beat)

• Management reiterated its full-year Adjusted EPS guidance of $6.10 at the midpoint

• Operating Margin: 7.2%, in line with the same quarter last year

• Free Cash Flow was -$170.6 million compared to -$75.5 million in the same quarter last year

• Organic Revenue rose 5.5% year on year (3.6% in the same quarter last year)

• Market Capitalization: $13.07 billion

StockStory’s Take

Textron’s first quarter results for 2025 reflected a combination of strong revenue growth at Bell and ongoing recovery within its aviation segment following last year’s labor disruption. On the earnings call, management attributed improved performance to increased military and commercial helicopter deliveries at Bell, as well as steady aftermarket growth in aviation. CEO Scott Donnelly emphasized that continued ramp-up in production and stable demand for both commercial and military products contributed significantly to the quarter.

Looking ahead, the company reiterated its full-year adjusted EPS guidance, with management pointing to improved productivity, margin recovery in the aviation business, and recent portfolio changes as key factors. CFO David Rosenberg noted that ongoing cost reductions in the industrial segment and progress in new product certification, such as the Beechcraft Denali, should support profitability. Management also discussed monitoring external risks, like tariffs and global demand, but expressed confidence in near-term execution.

Key Insights from Management’s Remarks

Textron’s leadership highlighted a mix of segment-specific gains and strategic actions that impacted the first quarter’s performance and set the tone for the remainder of the year.

• Bell military and commercial growth: Bell’s revenue growth was driven by both higher military program activity, notably FLARA, and increased commercial helicopter deliveries. The FLARA program, which focuses on next-generation military helicopters, saw expanded supplier engagement and production ramp-up.

• Aviation recovery post-strike: Textron Aviation achieved improved operational performance as manufacturing recovered to pre-strike levels. Aftermarket services grew due to high fleet utilization, while new aircraft sales remained steady despite some market uncertainty.

• Portfolio streamlining: Textron completed the sale of its powersports business, including the Arctic Cat brand. Management noted this divestiture will reduce future revenue from the industrial segment but have a minimal effect on profitability due to offsetting cost savings.

• Unmanned and hybrid-electric progress: The company made advancements in unmanned aerial systems, including the first hover flight of the Nuva V300 hybrid-electric VTOL, and continued to develop the Beechcraft Denali program, following FAA certification of its GE Catalyst engine.

• Limited tariff exposure: Management explained that most manufacturing is North American-based and USMCA-compliant, reducing exposure to current tariff risks. Global supply chain impacts were described as minimal so far, with continued monitoring in place.