TXT - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Textron Second Quarter Earnings Call 2021. At t this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to our host, Mr. of President Vice Salander, Investor Relations. Eric ahead, go sir. Please

Eric Salander

Thanks, good everyone. Tony. morning, And

forward-looking mention I'd during be These our to SEC begin, today's detailed we also release. which we risk our are factors, various like today. filings expectations Before in and to will are subject estimates discussing call in and statements press future

Officer. Chairman Frank Connor, and On today, the CEO; we call Chief have Financial and Scott Donnelly, Textron's our

website. Revenues Our in presentation our Relations be section billion, in $X.X found last quarter. billion Investor the earnings the in up call can second $X.X were quarter of from year's

in this to in was During call a quarter. flow million, $X.XX Scott. million year's from non-GAAP we per up second the the $X.XX quarter share XXXX. Manufacturing over net . income, from per also was pension last income second second $X.XX up per share contributions profit in year's of the quarter, $XX cash $XXX of turn second measure, the XXXX. $XXX for that, I'll quarter net compared totaled million share. before of Segment XXXX quarter to Adjusted million, $XXX the reported With quarter second of

Scott Donnelly

lower everyone. quarter higher on morning, X.X% higher commercial our the good revenues. a And partially quarter cash had military generation. by with strong and Eric. Thanks, segments, operating second were revenues revenues in up strong of all of across We manufacturing margins The offset Bell revenues,

XX the last On Bell, of quarter. delivered up commercial side in helicopters, we year's second XX from

and and corporate, models, both the and across order internationally in commercial across commercial quarter all demand strong see and including EMS. our private, multiple end-markets, to solid continue We utility domestically activity

in the years, successfully lift, the hours over all knot rapid its selected July future Bell second the Valor due plans through about FARA, FLRAA the bids key Invictus mission Valor of the of way On XXX quarter Army XX% And lab X Army crews, parameters the a Bell schedule systems autonomous lastly, systems followed integration, aircraft. low-speed [ph] in prototype. year FPL in Bell emission flight demonstrator provide FLRAA with high-speed demonstrated XXX long-range issued needed June build following award is vertical this by of Over retired performance testing the Xth, with remains track to program September, XXX new to period, Arlington program, and to XXXX. on down for programs. meet on requirements [ph] On integration. integration announced validation including to the V-XXX for systems Moving X flights, RFP. in verification agility, aircraft both The flight and

flight Moving our on the Shore Force operating U.S. increased years. FX Systems program, to margins quarter the U.S. led Systems. C by to over LCAC the last up performance fleet quarter. where Ship XXX have We [ph] last strong at points strong few Navy. cash ATAC In the third we Air delivered to investments made XXX Connector, significant with June, saw execution driven We - basis from XX.X%, a another of saw by Textron activity,

business units At for Cottonmouth, of up in contract. to further and the the we built XX under Simulation U.S. related were vehicle sale as earlier XXXX the vehicles Aviation, we the and fourth due vehicle as will XXXX, portion of the the to development revenues begin hours business. the for recently operating continues program. award. increase delivered contract for purpose Citation fee-for-service We the our Offsetting program second of line did Land to at on OTA Corps' Systems and as As in Advanced higher Land and on and in prototype volumes Systems through also testing turboprops, The in some to top XX experienced an in margin unveiled integration anticipated Systems last up Army customer the Reconnaissance XX year, the commercial this the for we development Army's for XX Also revenues Operational preparation quarter. from Experiment. impact TRU MX aftermarket or medium was production Marine U.S. contract in Vehicle Soldier wind the RCV reduction commercial pressure our of year. jets program U.S. selected final up growth down revenue on this largely activity to the jets, program and of see quarter, its quarter, year's expect the well delivered quarter withdrawal higher turboprops, in last expansion activities from most Air and the remainder in RIPSAW Afghanistan

We Both Aviation. each continue these aircraft, the Longitude strong at and we received activity million the to quarter order see commercial end. of resulted and backlog for in growth Citation to Through type for of in demand first in CJX GenX our backlog are certification over These EASA to certifications which additional quarter. $XXX of billion Citation opportunities $X.X billion of demand the year, half models. the recorded growth expected $X.X the generate

the for On and has SkyCourier the year. progress entering as later towards to [ph] targeted we this new service certification front, now hours over aircraft continues accumulated X,XXX work Cessna product program well, flight

from were to the the of margins despite and both and to high we've up At intermittent businesses. higher year's the production operating performance Vehicles, and last we improved and markets. chain related Industrial. customer global experienced environment, driven at primarily volume Caltex scheduling, saw Moving by supply in line higher vehicles each directly higher retail revenues, from specialized Specialized pricing and Caltex, a strong impacted OEM quarter, disruptions Revenues auto continued our second revenues in shortages, order which At mix end our to due shutdowns manufacturing at efficiencies. demand have resulting

the these ability summary, we to our fully demand Aviation at production chain's flow our through While meet continued see supply and to and been Bell, we've continue outlook. we strong experienced In cash generation and to improved solid for and strong segment our the have Frank. that, commercial our over improved our for EPS impacted performance this contributed Industrial products, and Military I'll demand quarter order cash challenges. second With we turn demand, call continue to all execution retail in to work increased products, businesses, that the by retail

Frank Connor

Thanks, Scott. morning, And good everyone.

$XXX million. from of million the $X.X and due ago, review each segments million of volume starting in up Revenues year's second to year of commercial $XXX Aviation. largely from volume $XX at quarter $X.X million, inflation $XX of at favorable second net million of volume from Backlog a profit ended higher was the of volume quarter, billion. $XX turboprop the quarter a Aviation of mix higher million, Citation last of to Let's $XX $XX due million. performance pricing were and how impact the $XXX with Textron contributed, billion million segment aftermarket favorable up jet the Textron Segment million $XXX and in of

million the and up $XX to billion. fuel Moving at $XXX and million research quarter primarily a up XXXX, systems $XX to million, to commercial the were and million. partially $XX at profit Industrial primarily revenues from higher on in and higher from vehicles, the of the profit development was each performance. were $XXX Revenues $XX revenues. and million, billion. $X to Backlog ended related $X.X $XXX million due quarter, million lower year $XX the components profit down Finance million $XXX quarter higher year up revenues Textron second segment programs. of functional of was last revenues in reflecting segment quarter at were $XXX Systems, of volume volume impact and offset million to in last million due from million, the a profit military with from the $X mix. Segment specialized was million, At was $X vertical were ago. future of million, largely favorable higher from $XXX due from Backlog Bell. by year businesses. $X.X million costs Segment the up ended million $XX of $XX the $XX segment largely revenues million Segment lift from million mix up

$XX restructuring interest XXXX on Moving focus below million of We to special segments on from a another the strong management our charge working pretax million deposits line. cash order respect capital generation, $XX $X With the were profit. recorded charges million. Corporate segment strong we had our at reflecting quarter expenses activity across cash was plan, and expense Aviation. of and

a than of returning at $XX X.XX% cash million, million par last notes million year's million we X contributions was before stated shareholders, $XXX and $XXX repurchased shares, in quarter, In higher approximately cash September XXXX. second with quarter. we to the repaid maturity of manufacturing Our flow million pension $XXX

with reflecting quarter tax expect billion second tax on up, now balance full our To sheet. activities, Following domestic cash increased ended related the these qualifying we wrap to rate $X.X of R&D. year XX%, investments higher in be to approximately we credits the

raising of are outlook, of our to $X.XX manufacturing share, cash for pension before our a million, prepared remarks. from prior adjusted raising range planned to our guidance of flow with to our range up a We're pension full million for contributions $XXX million $XX outlook. That up contributions prior expected We million. from outlook $XXX our EPS year concludes $X.XX to per $X also $XXX

questions. we operator, line So the for can open

Operator

you. Thank

Jefferies. of question first ahead. line Sheila Our with Please comes from go Kahyaoglu the

Sheila Kahyaoglu

I guess, How are you in [Technical of Scott, growth? Difficulty] customers? in your do you consumer And of there's quarter. you this what about do X.X the from think any the change sustainability times behavior? hearing think

Scott Donnelly

a you think we strong sure. for I had know, order Sheila, quarter

come account in terms is be continues out, book-to-bill account was new aftermarket end here used our sale, as That about I that we you'll probably the we've for and of you And had to closer - the think quarter. activity that to through XX%. aircraft you gone see when order will Q actually equipment. strong two, was the - about for services of

we've know, I appears to as the you So be the sustainability quite seen year. strong, the through course of think,

the customers are new there of We it's that's of relatively quality to I you driving a that a and the new, whole market, aircraft, levels, great. lot the be for have not into at got market, coming I lot record so used know, people in out there's terms is sort side. very at strength low an in new mean, into We've which low all had aircraft [ph] think awful lot sale. coming used of

everything appears quite flying. is I sustainable. we're The it seeing, to be there demand think from

a look highest in levels terms If at utilization. is, in the we've that to you seen very long time is daily of

markets, the I club in although particularly now, on right demand, very we're to think European level, from fractional starting more macro sort US-centric to pickup some strong. activity of side, whole of to South very everything turboprop starting in ownership the if jet South see look the we're So It's is at charter terms you to American in the and see America.

little you haven't that turboprop to international our they part because tend a the those been just markets be they're As slower. know, dominant of market,

so small net businesses, I addition, at America we're things back. are it environment. see come So more into start when and sustainable as think - the far. you markets, And European And think think worth the you make high of just I We're seeing that and talking start it demand will to activity individuals, that then like about and corporate we're go thinking lot help frankly, the further corporate. the about to I year really starting we to a driving South look a demand

Sheila Kahyaoglu

you one maybe of R&D mentioned of about company FLRAA? about that then progression And on that FARA more think we color. as more funded it or in on Is that R&D? remarks the how your kind Bell, And do for impact. prepared Thanks

Scott Donnelly

point, are on the it Yeah. around It's he's the year, the both. But although pickup FARA program, as we're some preparing here share this the proposal. it, [ph] spending, But of seeing progress. of lion at we is making great FLRAA bulk obviously FARA, frankly, this is B&P

FDL and see test As composite I spending you'll aircraft this those associated flight through the said, assembly terms activity. the with R&D the in we're well higher principally of of really for programs of first progressing XXXX. But first design the

Sheila Kahyaoglu

you. Thank Great.

Operator

Thank you.

question line Baird. Arment ahead. go Please with next comes Peter Our from of the

Peter Arment

Yes, Frank. Hey. Scott, thanks. morning, Good

Scott Donnelly

Morning.

Peter Arment

Maybe the comments, just Scott, up your obviously just sounds demand across environment like following it's broad-based and on board. Aviation really

original production previous think kind was get I your plan. back plan the of of of to the XXXX recovery XX%

about thinking managing and this it you about environment? you are how think when Just that

Scott Donnelly

get levels. we've on been we're Peter. as of production us that And I rates, did think to we not But obviously, the end around we go XXXX only this the into our those to accomplish for year. expected, we kind year, track of that, color XXXX back raising gave as as

So those that's go well. XXXX. into up, demand as pretty think and bring through this I good going continuing rates And us makes year we feel about strong obviously, to

Peter Arment

as X.X%. mean, kind just on Okay. versus you're the just X% think And follow-up I of a year-to-date, margin performance. I quick guidance of

it's the second that Obviously, today. you So increase guidance in us at just giving [ph] just Aviation you're margin strong continued forecasting half? the at performance

Scott Donnelly

Yeah, we are, Peter.

I the to market, million probably probably up think it given strength we're the think of way Aviation basis points of of to going guiding $XXX a margin. the and of is couple revenue of on color the be a XXX better couple of

Peter Arment

so Thanks Terrific. much, Scott.

Scott Donnelly

Sure.

Operator

you. Thank

Skibitski question go Our ahead. with from comes Please Pete Alembic next Global. line the of

Pete Skibitski

Good to fee-for-service. maybe the Nice morning, UAV guys. follow Scott, quarter. on up

for headwind a more quarter negatively program impact year? troops of were expecting to out continues how And Iraq. to U.S. of out it in much Afghanistan, the pull to maybe the was As you think full can you? the quantify how of of even much kind Maybe that I be and

Scott Donnelly

go it's other issue point is don't probably, we're is detail, but of I that some the We seeing pieces and lot guess that - that - that holding business a is level of it into of of growth the back. Afghan just in our

redeploy will be think in something And optimistic be them a applications, a fairly performance that I probably of we'll look, we're happen. that's while takes utilize but more think strong. to continues the that assets I XXXX to other It and for impact. that margin those

we've reality been It's think of in of in has a those don't assets. a And conservative done we think how - that. just not with manage Afghanistan. terms I I horrible So The great team pullback job the it's the story.

assets So I it's little those a now. of is into redeployed not line And top right lot But get do a opportunities. bottom line problem creating it will headwind. again, of other bit think a a

we probably at margins not of pull guys, we're we're probably on systems, happy couple you track the just the we're a we're - on the see XXX of because revenue better what Afghanistan line performance originally when with We'll basis guiding look points you think out. of So really that I pressures there. than of kind but to some

Pete Skibitski

at meaningful and programs, that than especially magnitude for right, on return Corps They're an most team of it's vehicle some those I done bidding on Last Systems. they've Okay. one it's adequate an do me, guys Marine ensure you on ground OMFV, programs, pretty OMFV, program. the pretty bigger get you the things think also of How a guys there. - order

of return know, think I about you - the in got you you of get just in return TAPV light type program? the the

Scott Donnelly

not thanks, Well, production where you're life also price at on way programs full committing Look, the contract. program a Peter. an of EMD and fixed taking these in will be structured a

So get your I point.

that ourselves certainly, I lot situation business And we think the a would put contracting about never we learned in where had that. of a exposure. kind

They programs. could look, can programs. phenomenal be be these So great

I take [ph] way to some huge mean, are obviously, like things good them. of OMFE on to our think But situation technically exposure a to some we going and to fruition. are opportunities, that they on go, time TAPV. there's yeah, we're I going certainly, a not a to in guys them - look had we're the place come long have it's on But contract where of kind at we for

Pete Skibitski

great. Sounds, guys. Thanks,

Operator

you. Thank

with go from comes Copeland Our of line next ahead. Research. Please Melius Carter question the

Carter Copeland

guys. morning, Good Hey.

Scott Donnelly

Morning.

Carter Copeland

wondered or Systems, in what speak could just I of talked see what specifically, you Scott, the One, just ones. terms activity, quick what to trade that two used in you you're to dynamic in saw Just seeing inventory if regard about, ATAC given continue you we in you that sort nature in Frank about should was regard? of? performance aware think that should for Thanks. we there of anything Or anything that a the on then And in that be and regard? one-time second in one

Scott Donnelly

the used, Look, on in our reflect activities the right. on what's going market,

down So inventory I dramatically. low. sold aircraft think out is our trade need is have of The in used for largely book. our Aircraft quite

do we call you Assist run As Market know, what guys we program.

customers frankly, it know, backlog ever you onto aircraft, to book, longer their window cycle there that of do lesser shorter a to aircraft aircraft from help resale the to and And new as ideally try the than we'll and not when that frame, their we So builds even putting that. with continue a remarketing was backlog someone a sale. have of they time, deciding buy the what we much our for and saw

and So in positive. I would the it's, say, the all has that dynamic say aircraft used aircraft would used department, of reflected own our been I

Frank Connor

was a there of said, than across million. the the a and reflects, no, And mix, Scott for again, points of just, expectation strong Systems Systems businesses the year. of quarter. were basis better guide couple the I consolidated reviews kind unusual on $XX original as Overall program think in net nothing positive was So what performance our it the XXX

Carter Copeland

color, Okay, gents. great. Thanks for the

Scott Donnelly

Yeah.

Operator

Ron from America. Please go Thank you. comes question The next Epstein of of ahead. the line with Bank

Ron Epstein

Hey. Good guys. morning,

Scott Donnelly

morning. Good

Ron Epstein

a bit individuals it on mean, Who coming Scott, could customer seeing you much breakdown market? to corporates? give of how maybe the wealthy the I versus demographic. us is of back are you a little

Scott Donnelly

I private I historically, core break of individuals, is folks the of by of But a was - coming give think high down small don't net driven are I numbers. a which super said, companies, lot base. that the family - we have can our - businesses, And these is usually if about that's our big we it's core in. talk largely demand businesses, where know worth when as it customer

more that seen. back. out base products to corporate to where that to that Those a that world. those stronger think, particularly start we'll folks corporates. a classes But have at of in the starting fly more, are latitude, meantime, way, with larger it appeal, just we've historically have come you the we in there activity, As departments longitude see aviation we look and customer in the particularly is corporate as And aircraft think I the

as customers are new you it, know, that coming that seeing just of into refer You're demographic, I guess, to market. same you the

Ron Epstein

your Got I deploying PC. it, And know, levels Are it. in are cash you interested industry thinking you are consolidation? capital? pre-COVID, then relatively mean, it, versus got you that call about history, high still how

Scott Donnelly

Well, let the as happens. to watch think that. we we do. I allocate we're don't do we that meantime, stock of when continue and We'll this of into our always the - pending. Ron, know buyback, opportunities, certainly we'll in look, point, think to there's kind you But bulk guys anything I continue at cash

As Frank don't we have the a in the frame. payments until XXXX more made debt said, couple time payments quarter. of We corporate here any

I of So allocation a But think buyback. point, we this of have that flexibility share at lot cash. is towards principal our around

Ron Epstein

Great. Thank you very much.

Scott Donnelly

Sure.

Operator

you. Thank

next from go Noah comes Our Poponak ahead. question of the Goldman. Please with line

Noah Poponak

Hi. Good morning, everybody.

Scott Donnelly

Noah. morning, Good

Noah Poponak

essentially Questions order exactly the the ramps flat quarter guidance end And slightly. business seasonally, through you that down new to markets have through and the the on range, revisions. year middle technically the actually quarter, third the get second are have to the In and improving from the be into year. EPS EPS fourth of in usually would

walk you if through of bridge up income, taken $XXX difference? if you've that million, and the the net then million, you earnings - could free $XX just just And happens. me looks that how cash million could So like $XX is raise then

Scott Donnelly

much little I bit think a can how seeing detailed we But sure are modeling of I you linearity. go with on the not call. look, I'm

We're across a where I we through the Obviously, I seeing having in is linear say. stronger company. came period. most to and Aviation to know, first better of would we the guys leads more a a some We're you COVID quarters We're big linearity, this on in manage not give little - you I trying through be couple how was here more year know, a when And of working us example. helping inventory delivery historical QX. - four. that. think more the linear do inventory of that's get good off there three lot mean, you the and build a reductions capital, As

Aviation on modeling they're of where better be of of to area, couple of around to more the be. just initial a Systems, a We is And revenue here kind going couple upside. to I They're same performing revenues there, around again, guide. end a the on you a less be performance, of basis $XXX Bell's right. terms XXX we a guide. in some of bit EPS, basis bit some Bell's in of little margin margins think like points of our better mean, of that helped thought - couple probably challenges points I guide. performing on XXX little opportunities certainly the strong capitalizing up. couple that about million and of being the challenged margin million or market little about are But up - it's think the a in think are $XXX the of we will I are probably a versus know, don't year-over-year well, on expect supply that to because versus sorry, chain. it had so. I'm But would but more I demand, softer Industrial terms but So some

Noah Poponak

market. relatively period short been of we Okay. Or that? on you time, but to a as It if sustained, that strong, strength how handle now firm the the hold you stronger. to I increases? how And price question changing price, and of pricing looking then that maybe and - chasing get focus earlier like plan, And is want going 'XX. that of your experience And to of volumes. the you'll expect that the volume bigger the getting ahead over speak Can despite around of to half reiterating had 'XX I you to because see volume. sort in and that, of to the sounds you're response market for over yourself. that's having is handle wondered 'XX it's And then don't But could just on you to instead jet reduce back you're demand Cessna strategy wonder understand. decline Scott, want just prior that to are I how much short a just price also of production the recovering even at you the

Scott Donnelly

window. And question. part wasn't very a time we've a let's It's long enough that, you as sale strong cycle There was support, as going challenging through too much of reconfiguring X say, to just late short do delivery - on, dynamic for book-to-bill do factory here gone have manufacturing that, people just in was X you're to think cycle. things too to it's the I the not way, aircraft the rework period to to when particularly right cycle load the good is of the short that know, tailoring backlog order and month buy and that on a where

ability - that again better doubt customize straight. for aircraft no of industry when backlog. you've got month think this healthier visibility. It's - it's the terms is to the think X and the the there's configuration I it the in in And X more So a customer like to end you this gives of business I better

of we look lot a that's at. So what

So sales feeling obviously, we that, what as go cautious much know, got into are to for where year. for given a here obviously, you're back and the were expectations too on. sure, you cycle our want short increasing you we next the volume consistent and we good to with about year just increase not increased backlog. But And rate get going the volume be situation

Noah Poponak

you. Thank Okay.

Operator

you. Thank

Strauss David go of ahead. Barclays. line the Please from comes question with next Our

David Strauss

good morning. Thanks,

Scott Donnelly

Good morning.

David Strauss

to go about back levels Aviation, whether headcount you're where started Scott, you headcount and on add getting any challenges are? you that can you need? Have talk seeing in Cessna know, you needs terms - any where to of you the workforce think

Scott Donnelly

I gone in are production ramp the know, back folks started ago year. that a increasing or again. come in And company. off country the is - the probably but up hiring those as month time folks to Obviously, with should bring I do and the been the But same some programs of of the you as having that. people into out look, so get, hiring laid Day with commensurate we've or we're back So a that it's have into Labor programs we have wind number having frame. additional those We think, everybody increase headcount challenge beyond volume in to that are we about think down programs the there, to through

are So a is hiring. challenge. It we

unemployment disincentives think get goes hiring huge I get that for we are these some on, to the programs year people not creating will of frankly, off work. easier as

David Strauss

a to picture potential Okay. to on the that how play that? participate penetration you or a EV Thanks. guess up future? And continues bigger that the Kautex. I - How itself question business Kautex Can EV talk world in in pick about will as business transform for and in

Scott Donnelly

Sure. Sure. EV this steps world to two is there Look, Kautex. in

of business on. which us we're frankly, good vehicles, it's The lot the a first, very move gas right. is And a already participating for hybrid the from straight to - the

on done technologies that, even unique and sort in even the the post-COVID for fuel than pre-COVID. it's have hybrid And we've space. continues frankly, some to of of well growing applications, And that those systems volume was faster now So grow. it

think part systems just our good metal a platforms and as world, the very see And system. we growing there On to enclosures. So our participation of of frankly, a saw, gas of moved Kautex we composite from transition a became or I tanks from a BEV good business. composite these plastic on you closure pure that is and working for Kautex battery move business and gas to a think It's lower OEMs closure weight. opportunities on cost. battery right with is to It's the now those the same we part because lower will metal opportunity we're tanks. lot And

working we're and the and platform, very the as speak. technologies to those it's So beneficial to OEM qualifications through of we

David Strauss

the Thanks. color. Great. Appreciate

Scott Donnelly

Sure.

Operator

you. Thank

question next Seth Seifman Our line ahead. Please go from the JPMorgan. of with comes

Seth Seifman

little morning. about more a Thanks good for Aviation. quarter, of It Scott, what was high XXXX Hey. there? bit about And we in you wonder, sounds back of Is where talk aftermarket in into you year? like it's up it still much. that could the expect very the accelerating as XX% activity. the I if kind over growth we something see And head really the do

Scott Donnelly

number up Yeah, about sequential a on up is. basis. It's it basis. a It's on that year-over-year around double-digit

Seth, the up the utilization high time. is as of happening, in a what's So aircraft as long I is, as seen referenced, it we've

correlates flying, utilized. service that parts are And people aircraft So consumption. the and are obviously to being

it it of service, up we into year. the through and have as expect to the seen aircraft ramping continue we back balance grow nicely, gone have So do to

Seth Seifman

Okay.

JADCX. makes you then Okay. repurchases focus M&A, opportunities we heard for which focus And more share on major on need might business side for at future see I that communications and the area earlier, some on there this a think of terms comments business, do is focused just, Defense now, Defense at sense. the become your thinking all about And at be - point to of about for technology in and an the When the the the to M&A? think about of you Pentagon

Scott Donnelly

talk be I a M&A I on I But where look, specific we the the say think particular guess guess technology Well, would or be that - I space wouldn't broadly, space to primarily opportunity. obviously about the is looking. to Seth, we I tend any is look side. where A&D that

And is look, sheet there do. buybacks. balance that in standpoint, to shape. was So share needed from think I good cash continue - and out there do We'll to very we a our if something

sheet debt. on I the think through balance financing or have plenty of access we cash

we space - the do we need standpoint, too but from specifically talk won't continue about think say to I the I if buyback I But M&A. our certainly, do to without cash the is that would being around look. concerned where ability communications, So A&D we'll a

Seth Seifman

Okay, great. Thanks very much.

Operator

you. Thank

ahead. Research. comes Vertical Please go Our of Robert from with next Stallard line question the

Robert Stallard

Thanks Good much. so morning.

Scott Donnelly

morning. Good

Robert Stallard

I earlier Aviation for the window window yet? Scott, wanted to up it like? than to actually about times. is X that comment still you shorter you month follow X you on would bit just made in lead little Are Or a that

Scott Donnelly

window. we're think I in that

Robert Stallard

secondly, get starting from with customers earlier, That's happy are you individual going similar like again easy. to quite Okay. see these Or pricing and on And you Aviation, because generally to nice are better the them? actually fleet interest Ron's you question more then on buyers?

Scott Donnelly

of activity which mean very share. the sort be that's Obviously, sort fleet level, I buying tends our us, important the that's NetJets centered of is individual sales customer mean, around to at for I - our really fleet. and NetJets, customers Well, obviously,

that's I bulk of other there would you to So obviously, look out call we where I have on, mean, think what what at fleet. want there's I of aircraft. numbers - of opportunities kind buy that the we customers

around look individual our with this difference seen aircraft going fleet different I probably going Caravan bias opportunity, acquisitions. Obviously, sales, large deal. the other. for are on or our what's unique retail saw the we've you announcement programs had But FedEx, don't the between hard when anything one the a with bulk You know, at and or on and or the fleet instance, the which think that SkyCourier, aircraft or there's If for good sales. of our you But and way order compete will that. book we've

Robert Stallard

makes That sense. Right.

Okay. Thanks so much.

Operator

Thank you.

Please ahead. Our go Shapiro comes line Shapiro next question of from with Research. George the

George Shapiro

QX. pursue, if XXX, comfortable you with the like halfway to it's jet that to XXX. want better you're morning. or XXX back from And imply that getting Scott, in but usually or is kind said quarters, least than or like more should not But back of last of is QX the I QX, QX couple XX airplanes little of above which - prior should at that bit deliveries XXX an increase deliveries maybe a years. much you usually, QX get would Good have suggest

my curious just I'm where to as So is wrong. math

Scott Donnelly

at you trying trying We're delivery more that we're say refer much to and if a of would I linear I to George. kind to Yeah, earlier. this flow. get what look to do,

to that smoother The So which the that or quarter, able by supports backlog thing a fashion. spike we're later sales driven order this book, get in again, in when lot been the when flow considering look so delivered fourth you we year. this has you environment, by into historically have demand at, don't the extreme

operation, a So linear you're of be I aircraft lot deliveries us what's longer lets on backlog, in getting lot more getting more more a that linear happening through look think of and year. order is course you when our terms the at book, time the lead a the you're

George Shapiro

Okay.

traditionally expecting that quarter we've seen? the So fourth not big in you're like obviously bounce

Scott Donnelly

non-linear you've always I as the little a the as Look, the stronger rest in last bit seen George. think nowhere No, year, it's near but instance... of for for decade

George Shapiro

seeing next given do above now, deliveries get And that XXXX the you're backlog year given the - level? Scott,

Scott Donnelly

probably but aircraft We're that in as give few into can't probably we'll I range. we next get [ph] January. to it or - know, filler guidance Is any year, that XXXX guide [indiscernible] that to not you ready to quite certainly it's give you we're back trying aim

George Shapiro

us And fleet orders could of you percent or were NetJets this other to providers? the quarter what tell

Scott Donnelly

No, break that down, we don't George.

George Shapiro

I'd Okay. I try. figured, Thanks.

Scott Donnelly

giving number, but… to you close really to you was by I serial

George Shapiro

Okay. Thanks.

Operator

you. Thank

von go next question from the of Our line Cai ahead. Cowen. with comes Rumohr Please

Cai von Rumohr

Yes. guys. good Thanks a lot. results, And

of Aviation? comment of show you in at you that a both the next orders and little about kind would good So pricing pricing, up I if mean, could to bit better start I and And assume couple get the quarters? more Bell

Scott Donnelly

particular look million inflation. mean, I the Q, at Cai, you'll pricing, yeah. see in dollar net that $XX Well, Aviation, of you when probably

are the been, we that So and it, we'll doubt need feel to be efficiency than environment on volume all no business part pricing but think productivity this as I stronger to certainly part it again, to and like press mean, better there's and in well. is I that. the prices of of - margins be continue has has we and

on that. side is usually think the things the Aviation Textron I with of to do and we've been Bell, talking the strong. - pleased that So commercial don't don't the discussion we're of so suffice price we But about business, we say what any activity, get of kind to around much would side order like need into I

Cai von Rumohr

Got it.

Bell, still margins FLRAA, give to we little be I or FARA strong. and with of for us be go so the R&D more some tend is margin where lower, margin level Can a on there could going the to came of at by And the the given the vigor volume from most was be that was margins commercial surprised R&D the you and as pressure? the are color

Scott Donnelly

put, Well, even the on into with guide R&D And the obviously, that pressures to pressures. R&D guide. think I I FEL we're mean, those we're spending pretty hit that of increased track programs we comfortable in did our

Cai von Rumohr

Excellent. very Thank you much.

Scott Donnelly

Sure.

Operator

Thank you.

line with Stanley. Morgan Liwag Please comes next Kristine the Our ahead. go of from question

Kristine Liwag

Hi. Good morning, everyone.

Scott Donnelly

morning. Good

Kristine Liwag

that X your months following order continue of backlog this Thanks. in we strong forward up to a comments if Scott, activity. now, see Aviation, in window on right Can production? and you're some accelerate if volume in XXXX bring we see

Scott Donnelly

aircraft supplier The two that or can you some it's long of of pretty of much what just to an lead aircraft it our given have components. on looks I demand particularly times inside adjust X But movement. depending like. hard mean, always of to difficult the the nature do make months, that, cycle

Kristine Liwag

see. I

the strong So if then? a see activity, that's of is XXXX story the more really book-to-bill this let's for say, order we of year, rest

Scott Donnelly

Yeah, Yes, that's incorporate up what production would being into would end correct. sure. we that XXXX deliveries ramp for

Kristine Liwag

think in on And in And between we bridge Great. mentioned, upside see aftermarket and how also takeoff pricing about do of a jet you a Also, utilization. aircraft right, we then aftermarket, have Aviation? strong we're margin at and much high. deliveries you year with aftermarket? How that differential seeing landing new XX the do

Scott Donnelly

but a be margin it's increased don't the mean, that the margins. good to side, for we general, on break that seeing I fact - in tends demand us. aftermarket Well, we're out business those

generally utilization, said, levels a a aftermarket business. on, takeoff average least a it's record material that's is to growth, for drive cycles, It's in and we're utilization, certainly business. the good I which and mix the going as what but mix, highly think good landing continue of modern time, you dependent don't to for deal there's so the the of doing overall real or of margin change be at seeing And that's

Kristine Liwag

you. Thank

Eric Salander

this the queue believe that's I Tony, Okay. all time. at the in questions

Operator

correct. is that Yes,

Eric Salander

number? Okay. replay announce the Could you

Operator

Great. Thank you.

gentlemen, at XX conference for moment. available Eastern replay A.M. Just Ladies will and beginning one today. be this

the any conclude may You participation for and XXXX-XXX-XXXX time for Service. by using dialing code conference That and XXX-XXX-XXXX numbers participants with International code XXXX-XXX-XXXX are can enter thank again digitized AT&T Those XXXXXXX. does access you XXXXXXX. for Conferencing We access XXX-XXX-XXXX. at access your today. replay information and dial our

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Textron (TXT) 29 Jul 212021 Q2 Earnings call transcript