TXT - Earnings call transcript Q4 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Q4 2021 Textron Earnings Release Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, today's conference is being recorded. to conference like host, to now Mr. would turn over the your I President Investor Salander, of Eric Vice Relations. ahead. go Please

Eric Salander

Thanks, Brad. And good morning, everyone.

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

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

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

During In charges our XXXX this continuing share. the from quarter, per income restructuring plan, we related to or million quarter, after year's special we $X.XX tax. recorded reported pretax per operations of share $X.XX $X fourth in

in continuing the Excluding a $X.XX the quarter these of down of operations, XXXX million share from was pension $XX XXXX. $XXX the $XXX non-GAAP XXXX. million, quarter quarter. quarter measure, share fourth in income charges, contributions to for adjusted flow $X.XX per Segment before profit cash fourth the totaled million special the compared Manufacturing in fourth quarter of from was per

up Manufacturing million XXXX. revenues cash $XX.X year, per Scott. share flow $XXX per over full turn to continuing pension in the from For the operations $X.XX million that, in I'll year. billion, before from was up were Adjusted $XXX last was from XXXX. $X.XX billion, call $X.X income compared share With contributions to

Scott Donnelly

And Eric. everyone. Thanks, morning, good

$X.X we with of favorable activity a for customer conditions, the backlog year, levels continue $X.X in year remained low and Order and billion the with strong billion full year see the $XXX including out very pre-owned solid market utilization, at another In closed strong, quarter in end. growth business Aviation, inventory quarter. resulting million backlog Our improved demand. aircraft to

teams, manufacturing improved in trend strong more we operating which the generation. the Reflecting this margin Aviation flow a aircraft improvement for on of year, efficiency segment result, delivered of and a achieved a environment, our linear quarter. cash As fourth execution XX.X%

year, Also sequentially For XXX commercial XXXX. quarterly year, from delivered last we in in turboprops, XXX increased year, aftermarket XXX the from basis, up up revenue on XXX aircraft saw the and by higher driven utilization. a we jets,

aviation ground customer establishes Moving attack light parts contract aircraft. support aircraft, $XXX and Thai to for from Royal AT-X defense, US international the the was contract for equipment, latest as Force's eight spare awarded Force. training launch Air Air the million This Thailand

front, November, as revenues largely five completed program, in production on Osprey. offices its Bell the an Beechcraft part Air V-XX product On slightly billion currently In in to first This by over Osprey service contract of Force's the Bell, flight fleet. expected, the an continued revenues revenues. At Air Force next HX CV-XX down down awarded support December, the ongoing the Boeing Bell the reflecting completed process install $X.X years improvement US upgrade of the Denali first start the were wind in on offset higher lower the quarter, the test new commercial launching partially flight the program. modifications is January, a military. program Osprey the to In of with effort military the

up we XXX from the XXXX, On XXX in of XXXX. commercial Bell, side helicopters in delivered

the for We also broad-based saw solid year, commercial reflecting demand. order activity

that saw XX.X%, of strong another to Textron of execution points from full-year XXXX. contributed quarter to Systems, margin XXX we basis Moving up a

the Ship-to-Shore US fourth During a Connector completion acceptance to we delivered Navy the of successful after trials. quarter, the

first a we unmanned completed production setting System XXXX. Inﬂuence an potential the related surface On XXXX. up Sweep platform, quarter On our program, the logistics Shadow support awarded vessel Unmanned in to for of program, Systems million testing for $XX final common the contract was award contract

Despite chain drove revenue there auto In to lower customer schedules. at items Kautex throughout chain challenges, to the across Moving we sequential challenges, improvements XXXX saw including activity highlight to and demand. environment At global supply as of order our At summary, quarter supply Textron billion strong backlog a the businesses in pricing retail the to ongoing quarter. segments. strong experience both related order Aviation, disruptions in revenues production Industrial, Vehicles, to continue many steady the OEM we growth. see were demand in were year continue and Specialized $X.X

Air certification product expect work across the processes Corps programs. On to air At progress on core ATAC Center, the submitted in with completed Navy significant the contract program hours production the proposal continued test Bell's Textron proving GenX capabilities. ground, build, strategy program, The the SkyCourier grow Bell, the Systems, its US at CJX in with MX program effort innovative the X,XXX first of is the introduction and the in FAA on and opened Cessna flight test continued FX and test an flight prototype Manufacturing refresh our front, of made and of for product We fleet programs. Marine new aircraft. FARA, we've with demand XXXX. on certified continued XLS Bell activity, increased Invictus to the and our we we On technologies expected September FDL FLRAA Technology XXXX. We XX% FLRAA complete in support Force, to the aircraft of tactical US XXX a of the half year-end. refine we award Citation Army of and

which Textron prototype tractors ARV the in for Cottonmouth the We vehicle into equipment and our the with globally. the Marine innovation ground Corps. entered for electrification continued cargo baggage for Specialized loaders strategic airports will US our the the a we of of in tractors, Vehicles, use support At belt business development MX with assist activities, GM, rollout and Army collaboration and Ripsaw

XXXX, compact were golf seats eight awarded sized car powered At ion new on electric for a contracts the We hybrid our by also in vehicle Kautex, to industry's four PTV the fuel systems. offer lithium Liberty, introduced first platform programs we in forward-facing battery.

resources expand across lower margin and and in launched our across chain flat increasing turn driven opportunities projecting in aftermarket our to from production, increasing At ship-to-shore Vehicles, cash and our award aviation XXXX. growth in OEM aircraft. revenue these eVTOL and awaiting while plan to expect and product volumes in develop by is over to of Within on to utilizing to revenues improving a fixed offset backdrop, we're increase to XXXX the expecting we Specialized down-select across our call air guidance. a period Textron's lower propulsion and revenue with EPS we're related range while electric tactical volumes the volume. of programs, expecting auto $XXX we revenues Manufacturing conditions million including and $X.XX improving we're new $XXX With to FLRAA eAviation At in pension to military expected Looking the the for all lines investment Industrial, before per the $XX.X and developing of growth billion share. I'll contributions to the businesses volume. Kautex, range $X deliveries expect XXXX, we're represents At Frank. Aviation, supply at efforts projecting about programs, At higher shift Earlier improvement. anticipate we production XXXX flow XXXX, increased initiative we on we beginning Systems, products. to transitional as fee-for-service be systems. aircraft, Bell, by this program. With financial the flight, accelerate to that, of million. projecting expertise leverage We're wing technologies In sustainable growth

Frank Connor

everyone. morning, good And Scott. Thanks,

pricing quarter, was $XX fourth each Backlog to the $XXX ended volume, Textron million partially billion. and lower the with of at profit how net the last the Segment year Aviation volume. due million performance. fourth offset segments starting $XX billion year's million improved of quarter, review of largely a due quarter manufacturing ago, Aviation. down by from $XXX inflation in higher in aircraft $X.X segment Revenues at of $X.X largely Textron million contributed, Let's to were favorable aftermarket up from

were by year, was $XX line. $XX lower million volume Revenues primarily at segment in and partially $X the million down product million, Moving from which fourth $XX revenues reflecting fee the million from ended in by Textron volume down segment's the $X.X primarily fuel from largely Segment in revenues of quarter from At shortages, volume profit of volume, impact million $XXX Vehicles lower lower withdrawal billion. reflecting billion. Army's by and ago, in last $XX revenues. last segment Finance lower million, and $XX profit revenues Specialized the product down included impact $XX million. down reflecting year from global offset a to a million, commercial supply the to offset $X.X performance. line, contracts. Segment disruptions due due to the military to $XXX quarter of $XX $XX the XXXX, $XXX down Systems, down pricing, higher last mix, lower military year, the for Backlog million mix from profit ended of million Segment favorable and systems partially million $XX at Backlog year's million of of were favorable largely $XX revenues, million mix. functional fourth quarter million lower largely Bell. auto were partially impact was offset to US components was Afghanistan chain and OEM the due million, related $X million, on were segment the $XXX Industrial the quarter volume. was order to from for the due from profit service

Moving interest below and segment were profit, $XX corporate each expenses million. expense

million approximately flow shares, and was for cash million In $XXX million the quarter, quarter billion cash the pension in we $XXX year. to before shareholders. full manufacturing repurchased the contributions Our returning $X.X X.X in

year, For million of XX.X shareholders. repurchased to returning million we the cash full $XXX shares, approximately

about begin higher segments Segment operating in our I'll of to XX%, with XXXX At range Aviation, $X.X now across leverage. presentation. all Textron on volume, volume. product reflecting be and we're expecting XX% deliveries the of approximately X pricing is margin reflecting favorable increased and increased outlook. slide to our of aftermarket earnings Turning higher expected the revenues lines billion, the to

the we're margin Specialized forecasting of Industrials, XX.X%. segment about to a XX.X% higher on profits to with and volumes we're the in of about to in about We're margins Kautex Vehicles. X.X%. to billion, range related the to high production. We're and $X.X estimating lower Bell, Looking forecasting HX largely about primarily to revenues military levels due we're we to reflecting military XX% continuing of margin Systems, investment. $X lower of revenues XX%, of of volumes about estimating Industrial At million. of At volume about X.X% expecting lower segment be billion, at range revenues range Finance, the of a billion expect about R&D At in $X.X $XX

slide pension million, to on be the be about $X Moving we're in We're to in to $XXX also expecting tax $XXX share impact the to change law earnings a contributions XXXX. which from beginning basis, range consolidated per flow X, share. $X.XX a manufacturing of to $XXX in expecting approximately million R&D per an includes before cash

projecting Looking effective to million expense, investment of slide in million We're $XXX about XX, $XX approximately includes a full-year which of million projecting interest of we're of about tax $XXX rate also XX%. corporate eAviation. and expense

the items to million estimating million, and $XX income $XXX XX. be XXXX turning to to Looking We're last up other year. pension from slide about

from to XX, up year. $XXX estimating We're from million is CapEx in expected be will XXXX. to last million, slide $XXX R&D about million be $XXX about $XXX down million, Turning

assumes outlook remarks. share That million count our prepared concludes shares about average XXXX. Our in XXX of an

can we for Brad, questions. open line So, the

Operator

Instructions]. Baird. our first with question comes today from Peter [Operator of Arment line And the

Peter Arment

move year production going describe level or of kind Scott, just supply the In that think XXXX? have any from maybe the XXXX? challenges jet quarter, chain the is the any to kind had jets bizjet where fourth of production you could you of in you did into

Scott Donnelly

about, we've been As ramping production we up rate. have the talked

course see the to throughout do to that of in continue been still robust marketplace. very The that We We expect to has XXXX. do continue demand and strong. the backlog

think from market I condition. favorable it remains So, very a

had own on had rates But, there. haven't to problems deliveries. no, our to impact had and here haven't any and resources in guys rate training our work and every business. continuing production have that shouldn't board impact – we The did people our through month human issues or I XXXX We're not The them problems. supplier bringing always we on say bring ramp continues. We

rates ramp suppliers to continue meet with We work as those they as well.

think coming look with forward, of we again, out backlog. We I around the somewhere year as look, like XX-month we're that.

run. paints, So, whom that's very I allows think their business opportunity It customers, an for who are used I It more customer a efficient to visibility. end upgrading a healthy all way, how a It rework lot for to customers process. all into a very very aircraft and should towards us things specify go accommodate production need. of right? sell line the our healthy allows that many Interiors, and and it to them the those changes rather And of you time to aircraft. the bunch gives for it's options, the better involved think us. gives in really having it's much than cut things the And in

for keep eye I us. makes our makes Again, it So, if of And a our think class I XX-month. of think customers. that lot of sense sense an that aircraft, that's on kind to to

we environment, as and and see happy levels have. with at we But year we continue goes a on, where I that very the make we're the we backlog the think obviously, fit. to eye will keep adjustments So we'll demand close as are on

as for customers cleaner, think, us. business, more for It well. much it and as been more said, a linear to it's easier I works operate, I good I for makes think efficient,

Peter Arment

that back Or should now as given Are it do XXX you think, not really level to just production? you a mix? Just plus to we that, jet look follow-up the on the Scott. back at way

Scott Donnelly

back as we'll we XXXX get I we're those were for little it. levels. XXXX revenue levels to probably our think been And back track we where the feel be you in think, we've think guide see sure, we'll I to I And an volumes, on we're early – sure, but saying, a XXXX. on think above keep guidance. yeah, that to on in that those eye good But, we

Peter Arment

goes full there's it you Just lastly impact, if any? quantified if if have CR, the year, on any

Scott Donnelly

of it resolved, don't think point CR to healthy any fight on day. Peter, is have it If still the ends thing not I not in we gets industry. basis It's up at. February, I one we being of we going March. kind going but for we We're itself that the to through full for specific it's government. the really continue it here probably haven't. kind Look, year every into resolve a the healthy hope thing,

Operator

from the Kahyaoglu Jefferies. And our next comes line Sheila of question with

Sheila Kahyaoglu

it On and how factor down as should X% bps. is Bell, How additive we contracted to that revenues pension and that? be as do XXX well margins FLRAA are into about R&D lower think given does

Scott Donnelly

that There's [indiscernible] the doubt see no there's at to the going that all that's margin to driven Well, winding parts, compression Sheila. HX Operationally, some constituent down. Bell. we're by the program continue fact

volume So, you're important losing what's been production for us.

We some there, have obviously. offsets will

I deliveries. in terms year think commercial good of a have aircraft we'll

R&D the but lumpy, challenge. on I aftermarket you pressures. a continue a think said been some given as expect, I about very It's do see they've We here, Military think we're heavily FLRAA. to a will I publicly staying is investing what probably to side, what commercial it it process. good work and be making of bit know, FLRAA most is the US both little FARA importantly better, on lot customer It's the sides, will but track always evaluation proposal. they're huge a think we're around of we've appears with progress. Army aftermarket a going particularly bit the be seeing, on but But that

huge the towards year say, middle numbers will they've a it's our to has to something to most I probably put a a continue they're it. this expectation an think saying. that in we of year. going think revenue as and But been get I high is that under on little this take of pretty think program track support see the make program I reasonable and announcement R&D Right? I in to So the with level is of associated – going of while turn actually for we're into balance a that throughout So, contract it to of what

really what's that's So, on here. operationally going

good a margin FLRAA high win of to with a seeing HX the of and shift mix continued in even on with here, volumes, without slow R&D associated a transition a levels that down, of revenue particularly event ramp doubt program. are from We the production recognition sort

Operator

Cai our line from question of And with Rumohr comes von next the Cowen.

Cai von Rumohr

was, they FLRAA still by was the Is in downselect expectation understanding? mid-year. make understanding were mentioned the that going You decision that XXXX. your to My

Scott Donnelly

is response Cai. normally through working I – question what kind proposal is, magnitude, the This actually Sheila's in contract, that And and time. the in they're it's this think some It big you'd in and between I All a realistically it's of of on under program. think I from that notices track, that that difference there's take who is right? to I was a process But saying was we getting think see to we're on heading direction. winner evaluation announcing going a

at though transitioning therefore, being And QX, And to little going on that, I'm might announcement come bit that is, go the to the quite assumption actual our of we're going disband say, so, of even time. a expecting take end possibly let's team. not contract that is into

to So, the retain of funding have until time to such do we're to team going under cost part contract. to share as we that continue get

Sheila Kahyaoglu

And have versus improve pricing, I if in strong, that that did price you mentioned, you you but hikes know did tell you many us QX? had can pricing And XXXX in at how then, quarter in one and maybe where XXXX? is have Textron,

Scott Donnelly

we've is I guess price the – for around long dialogue a negotiating deals. realization, you're right? time really, So, Cai, these

strong certainly to pricing be continued in So, yeah, QX.

year this and we're our inflation. continue still And million improve on about I price. to yep, right that to well. expect of so see price, on as that continuing on You'll realized our of positive $XX And, indicated, well ahead

Sheila Kahyaoglu

for Frank, you. one

credit of flow numbers a assumes release, reading mentioned million R&D cash think the your So, you I hit $XXX from in amortization. through kind that

did and assuming that correct? is basically whereas RTX not, Lockheed you're that, So,

Frank Connor

are It might There's say kind looks like of this interpretation that different of of kind not around capitalized. might be some be folks capitalized handling dialogue I'd are differently. on what what included I and the is on that in looking more guide. impact, – an taken cash our and at have terms of of conservative it things, think, we've approach the end in the we

range million, are assess gets I associated the how with the to $XXX full it's impact and would impact said, implemented. larger people how this with that looking So, as be of

Operator

question Goldman comes And our Noah Sachs. next the of with line Poponak from

Noah Poponak

conservative terms as But I being still because out what but of applies R&D sec, there of percentage may Frank, said being talking had that a think to did you what in they've in here, an you're us. what tax if Or just Lockheed similar it's to they're laid all that's to stay impact forecast a past? Do laying for it just been out originally had they understand you've that and credit in the now be there, correct? incorrect? think where evaluated you only saying about

Frank Connor

I hoping real of the tax – lot I a for this. dialogue dialogue of I and interpretation we're there's focus This in yeah, companies invest to we're for this, investing the around as think it, and is on in it good the answer that the R&D, future. of fixed, kind there's community, gets not continuing is the think, of the nation understand around all

there gets are discussed we're all so, in different And but application interpretations tax around of hopeful fixed, the being it. that community the it are

Scott Donnelly

purpose tax of and the R&D of this to allowing look, sort thing ridiculous, the you The that if transparent, for that, incentivize is R&D. to whole they – All credit by thing. defeats purpose right do do So, I we're the is be trying mean, whole this And right? is to not right?

repeals interpretation, guidance. transparent. numbers. our it that that removes guys So, We're we'll to immediately you or day giving the add some passes bill it The or we're a

Noah Poponak

the can and bill But changes a where interpretation. without considerably law it even be that smaller a it's just different accounting still actually

Scott Donnelly

So, look kind of would the credit not is what That our and today, with we does to would here be of, say the sit today. if the payments cash have we will to get changed at that. tax this that and I'd approach that R&D resolved as expectation that that implementation how completely risk tax law we as our Right? what associated are handle get our is the

Operator

question next Robert of line our And from with comes the Research. Stallard Vertical

Robert Stallard

two, said just terms longer about over pretty for, production Scott pricing sure of your or well future this not the incremental three-year not the for margins margins, rate, is I'm far year, this you and who times. aviation latest period? steadier positive what maybe lead so but a year outlook in say, sounds prognosis What's Frank, on as the,

Scott Donnelly

conversions to think to said Robert, always we've realizing. we're I what that ought in that's be XX%, XX% that and somewhere these

getting to leverage guide, look nice a with increase bottom you you're the and the revenue So, line at associated good that.

Robert Stallard

range, with the moving top that fair a assumption you through? towards So, you say, end pricing are is coming of this

Scott Donnelly

margins of see if time Well, as in the we'll convert XX%, growth, I I those kind able we'll this to think goes XX% on, do because to continue we see revenue be expand, continue think to incrementals.

Frank Connor

There's that SkyCourier new have like over and and things. programs on impact time, things in, coming Denali

So what there's consistent some variability generally, said, as look with mix, it's about. talking as been we Scott we've but at

Robert Stallard

relative As division, what three follow-up, these any the have said in months got the you chain? on better industrial a supply ago, to

Scott Donnelly

of were. think they're I where kind they

we'll as think so. we'll that in the as saw reflected that's But we what see quarter seeing or dramatically the factories, the expectation just But The this last of into our here that trickle week spike, speaking, you that went crazy operations. it a I down our year, come looked see our has that into news of this improve, through good guide. impacted I if we're here which realistically supplier as or the progress and bad think, you high think some the in December news that expecting with factories, up. see I clearly January, or it's Omicron a little line through is – bit of certainly we the cases we'll is we're so impact of first

into realization all, the we'll all see slower quarter of have the going you as through year. in first and improvement probably go that, we in But the a second. So, certainly

Operator

next comes Barclays. the David from with our line Strauss And of question

David Strauss

and [Technical on touched you pressure from there Frank, and the Scott Bell Difficulty]. the military

win to what FARA, outlook happen for military you not of FLRAA the longer Bell? business If or term were to is the

Scott Donnelly

if program. we've Corps, about as you impact Look, maritime FLRAA There's look, very But, a programs don't importance the the obviously, competitive is I FLRAA, Marine to look, making programs, for underestimate the military challenge to at, in think of and program the Bell. an it's a place. But, good working for got win for But and noted, we're new and beyond of we've But, there's the a high-speed future opportunities. we've that talked other FLRAA important Navy and certainly lot That's We've we're hard sure. also investments sure. certainly us, want working – number opportunities a FLRAA. the are you been program strike FARA, that's to VTOL. there any FARA military for on in got lot of a in we a of something we're don't

David Strauss

talking your of you you half about looks kind like in a working to But to levered of is based guess, million, going can obviously, million cash assumption forecast? flow $XXX free be deployment, highlighted capital Frank, the that, of million capital – impact. I you're year. R&D $XXX the What $XXX that underlying by buying maybe million $XXX the end you're on times stock. kind back

be? to thinking term capital So, how about are sheet where deployment balance longer the you you and want

Frank Connor

like that little the other we tax capital. but payables, as looking we impact working we of receivables, working of inventory ex bit ramp an places. that, will can does commercial elements in flattish businesses, growth which think capital of likely kind But number, in working from kind we're we see you standpoint, look a capital inventory associated things From offset think other with at at a the the

good continued So, working capital performance.

of investment Certainly, terms business. the obviously, cash look outlined at, same. flow, into and back we R&D We cash that. the In remains deployment

in model acquisition loaded. So, go cash that we The number a bit repurchase our actually we've count of little the rest share would modeled activity. towards in share the for terms activity number of flow in has always back-end But do. our some repurchase free share

So, repurchase standpoint, with from repurchase activity of we're that roughly line dollar undertook thinking that is a year. we the share in – past the this amount about with

Operator

next from of our with line George Research. comes And question Shapiro Shapiro the

George Shapiro

projected last point, Aviation at year, Scott, this you billion. at revenue $X.X

So, wind incremental effectively and good We that. you on up XX%. you X.X% is guys But projected like profitability are quite with of X.X%. the

with For what current way what were saying, the down particularly caused XX% where be is, incremental. was quarter But projection, question in year profit you're your up. you're revenues line last fourth good, my and to so

And that guide XX% XX% this so, for margin year? to is upside there to

Scott Donnelly

year. to pretty obviously, back XXXX going a XXXX, Comparables was extraordinary

So, you would returned expect lot to see normal. performance of as a things to kind better overall into XXXX

incrementals why that's world the I about So, XX% XX%, on think you're that business. into talking we're back where these

mentioned, having effectively. backlog strength which helpful. And again, more and We in I long obviously the pricing much continue to being all year, of the seen plants time, it run a in really a efficiently strong environment. We've as in the we helped been a very strong hadn't environment pricing has is

heads are way reasonable additional and obviously, we've And to down So, a drive tailwinds can XXXX and got I think to that. we have all those our margin, have we – keep delivering. our here if way keep into us. things do we But

George Shapiro

How was one Just actually quick the Frank. one, in quarter? much aftermarket up

Frank Connor

Aftermarket, on and basis, up at up sequentially Aviation XX% year-over-year X%. was was a year-over-year

Operator

Peter our with comes the Global. And from Skibitski of Alembic line question next

Peter Skibitski

that year you right have much want Scott, planned. skyline this seen growth delivery Do to think your just how incredible you have now of the with year, tease market Could hot flat? jet grow? could visibility backlog sense you backlog you business you've the could out that marketplace of backlog and in or the it Do any stay year by you this down have work the the end of how is? any

Scott Donnelly

kind sort say we've QX, you X.X I of pretty the of market got hot. see – again. would it's numbers. that And is where

able would All look, out so visibility to again, is work to selling deliveries hard every skyline say, So, able models. a and But, like be understand are salespeople over that us Pete, I that that's I by we good. think day. our important of that way. being to of efficient an there month And, look it's in out to

go visibility future, able think to where have industry, And we'll I even then and if don't radically – where efficiencies. and into it's do the visibility and backlog stupid to where further you're back the those rates customers, accelerate try I then production But burn at get being then don't don't were so, companies. we we the healthy Again, that think down I you our rates. don't look for to start look to don't have looking continuing want something and production increase out or you we to at

keep time there. that's process we'll a think place to of of right, in customer's expectation they start of And good those of historicals from on, I have a right kind come kind take back So, in And is our what want to keep timelines buying the eye the terms a they delivery sort a and what for now. when of aircraft. I that it we're should we think normal

Peter Skibitski

in last will cycle? certified be one. this the Just commercial And are XXX helicopter one Where the we year?

Scott Donnelly

Look, We'll nice disappointment the to solid in what terms again guided we've what We've get in certification. in think through in helicopter has we've as a you that see XXX aviation. look, good demand. Well, is, seen We a numbers. of clearly saw XXXX our us seen delivery commercial the increases. I we've ability to seen, for that been similar

done year. this a I good lot think of there's work been

think on good we're a I path.

that the starting customers seen addition You've there the some that's out where, certification working many press to will because the in to basic probably our need in so of we're been cert, capability. do ICE the of stuff

this we're certification certainly, we expect And, So, right get that those year. done now. to paralleling tasks yep,

Operator

our And with the comes question of line Spingarn Melius. next Robert from

Robert Spingarn

across the Scott, able operators? you to the would parse the also out the the talk you perhaps within Aviation, where demand versus strength? And the customers, of be different see then, types versus corporates the individuals portfolio, fleet about

Scott Donnelly

well give high the would buyer, now. as, a way. both is is been is that's individual the the I I strongest in demand whether to worth demand guess that color strong the very jets or corporation obviously, say That's say net very as robust that I leads a market fractional right the environment. could individual, the

seeing with a demand our of partnership lot NetJets. So, we're through

it's say, board, in would virtually, guys up reason business that way So, of is, Turboprops strong. strong entry is not is – again, not as market smaller demand. chunk robust the robust there, There is bit quite the usually through They're North part that still from is very it's as part you America. a that I models, level jet When And than jets, outside biggest US. we jets. North see look now but into quite turboprops, is Airs, at little US when where longitudes, King strong, US. A as a the us as of behind. the market the across and look specifically the that outside for you terms inside our also of jet you is that's stronger as market demand for America the historically instance, all of know, but that

strong. North the America by North it's it's American so led but, marginally strong, because, right So, again, now has recovery been frankly,

than So, outside the and terms leading jets have that one, in market seen better demand, to But is say of of way. it's we that certainly and up one picking the US color, it good. is so I seeing would are that

Robert Spingarn

specialty the Just ask quickly inventories to side, the on are. vehicle how wanted

issues, obscured. dirt sell-through has you the Is supply of the But gets this takedown touched outlook market? or on been snowmobiles I the with season? it. what's good think a the chain it for And the little

Scott Donnelly

stuff to we If frustration machines, supply It's only the market. more is it basis, look, year-over-year machines a parts environment we I more is I'd strong, is being right which through able now, volumes been saw there channel, get build The is if say, actually and tractor have the there. our terrific, challenge even chain. dealers. to more is. very the sells on improved get better out the could only out Yeah, more Look, through stuff demand we guys. it get could but have

So, a It's problem. problem. demand supply this is not a chain certainly

Operator

from of comes from Kristine Liwag question next the our Morgan line And Stanley.

Kristine Liwag

especially how Aviation, you offset labor with As in And if the straightforward pass terms much managing inflation at escalation try in you to risk, backlog clauses? much about materials of potential How and raw is lower would costs? through talk we see how builds prices elevated can a you're level?

Scott Donnelly

inflation, net Obviously, positive keep of a here is pricing, our to intent number.

certainly we so, And do see inflationary pressure.

seeing one degree another. I through everybody in the or to is that come think world

businesses agreements bit. a helps more Some cushion long-term which little others, have to than that

which exposed more we are but Some problem, put transportation out lot a virtually to costs, of that. immediate, and that's there surcharges a are logistics respond freight businesses right to In the away. where we

and the offset surcharge prices actions try of and pressures think, to good plans conscious very to have, that. inflationary and around more than very, I we're So,

Kristine Liwag

next path contract, Bell, XX% win down roll in there if on Maybe Bell that program is FLRAA, margin off the the to the a with upside Is line. and few years? with really farther you back a

Scott Donnelly

you efficiencies But where and gain of we've that, don't programs the margin that you downs, XXXX a obviously to coin, that lot And time we as know. Bell we expect today. pressure the won't been that. a where probably had as more been for of multi-year that I other be I range. when business. saying it's sort well the but a we see beyond on XX% us production drive could of long to see that's very guidance, benefits Look, go in We've of ramp above strong XX% some side of

too know So, obviously, again, programs. clearly, like mix. still programs. about what to XXXX. or look those guide even magnitude out like these there some there's FLRAA, opportunities our increased going we it's early, would of these of you XXXX lot We There's talk the programs. of pressure don't It'll on think you programs on large a the But, think I aftermarket how is depend production EMD when in of for military programs, about some of on some some the still to unwind when production

that of every a for will time. be. adjust So, what the long I probably to kind to we've said got And that's think is XX% business think year. reality I But we where XX%

Operator

from of And Bank America. Ron of our Epstein next with line question the comes

Ronald Epstein

more your Boeing probably of do about you'd crushed. you the risk. get have of wondering vertical share some dollars lift Arguably, given traded a one business. if you're just half a publicly this, companies I experienced billion was companies into eVTOL Scott, dropped at the thoughts of that some on eVTOL. just We've seen

You aircraft. do lift smaller deal of with vertical kind

market Just how and curious what about think for your sense you on Textron? it the is

Scott Donnelly

we're a execute these think than in that. market I better anyone Ron, go to on position doing opportunities. We're

the I us we sorts company, think of the that is talent in things. to have for infrastructure do these the already, and advantage the

half So, investments. announce billion a I to don't need dollar

product. that's of before practical like, invest need $XX here sort laboratories guys, to putting what spaces been side that hangars Look, this million we're have probably stuff. flight actual is you to are money designing in know I indicated and out of to we've is density We aircraft. Part design think of going we the So, year. these on just on lot XX have look But I you I guys we that all of think the kind engineering our a the leverage controls tiltrotor, Bell we're test be which have and to we've think a to to don't spend my in building and have spend spend, have I of build tiltrotors. can money technology, certify to baby approach doing technology capability all how talked that and stuff, I I and and that our a right? comes stuff. need issues, office battery

lot we're number how need that that class knows cell our of strengthen a to strengthen our this capability We understand tiltrotors, try part that need electric the thing. that of at different of don't things. so, that on type. And fixed and part of things to really to frankly, with certification do a to our side strengthen, business. of and wing looking to to to suppliers do the we're battery working aircraft There's do battery, business propulsion knows how and weight But angles we

happens. mobility doing there's business every look, just a and when us business. a reason out reason to we're be that. eVTOL I air there's I for big I that could And all to around So, that model throw think don't and dates electrify, think But lot believe frankly, the we'd all trainers, a wing It's this urban think business. than come that very think think I there's be to fixed assets market. it's into just I is Right? could would a don't market, that stuff. monster only great. love be frankly, eVTOL. That that. supply more about But not There's And,

player think, looking us pragmatic making big be and at So, probably we're taking in opportunities investments, I more a and that. approach the for to a right

it technology have we we the modest that should with space. be I in and winner think do in already I But company. leverage can investments the we relatively that think our

Operator

of J.P. next Morgan. line Seth the comes And question our from with Seifman

Seth Seifman

of guess Scott, guess, way through NetJets I'm sure, the I but at totally I want three that Latitudes. not you're to least agreement quarters probably the on

we do their how so, Latitude here as you those XXX of goes sort aircraft the as end that importance approach and the from about And a think where demand given customer? of level

Scott Donnelly

question. order. I was good the It don't a huge a That's exactly recall numbers.

to going. that enjoy very put the I that strong. out close we have sort of to window it think those reason that has into that keep their think And we been there. the know, forecasting term quarter got of customers of The you every As I hundred have say enough get to manage we've and that's couple don't on terrific. XX backlog we're to we think to relationship that defined I with very in we guys for airplane we're where terms aircraft We I as we negotiate would work that lifecycle all aircraft and through of the NetJets working another we've of and how would XX-month of already to performance of provisions to I every guess, number I together. that say, that. for is the started NetJets, healthy. an point deal, when executing on would It's negotiate to the the contract extension

Seth Seifman

win, no Kristine's with up on an at assume Maybe can at a But EBIT bottom question, point. following there's that Bell? understand XXXX Bell this we FLRAA is that XXXX guidance

Scott Donnelly

other terms programs stuff course those the of and aircraft will want of don't all commercial through things. a XXXX and I to lot sorts that Again, in happen There's of and just here of aftermarket guide XXXX yet.

into what Bell that at So, we there's mix moving like and parts in our this of into the EBIT goes haven't levels delved a look at certainly point. lot that

Operator

question line follow-up from a Noah of Goldman Poponak have with do we the Sachs. And

Noah Poponak

Scott, you Cessna XXXX you decline XXXX from of in that the half XXXX. first projected deliveries in to recover would

just actually has of a market considerably now, about quarter essentially two-year bit. light you're Cessna those for exactly guiding like exactly a that. XXXX you You targets XXXX the to since year period a report. span pretty XXXX But the to provided fourth strengthened And that, ago. slightly it that would seems back much maybe projected with first reported units get And you first

those be so, strong delivery it's about been market not the prudent you where with sort rates the in of seems sort past. has is through cyclical the and of strength, the like numbers. want to strength go really of and understand the But the is incremental And last this you in production here XX months coming it

Scott Donnelly

day. and can if we to every expectations the order through the what think additional that demand we try words, that there, the look Well, we and a we've at how we We'll tried the capability guidance. if do on think year and do look look, rates aircraft, to in we market supplier provide is what of market guidance the can out the there that can is course other plays – we work the hit – like

is obviously, think opportunity It's at plan supported us for the what said. the that and today. upon path. and that an deliveries, improve [indiscernible] guide by to there we're I we'll is that's to if that appropriate looking we've that So, down backlog, the go But

Noah Poponak

excess bookings you saw XXXX? was similar to anticipate XXXX that rate in a what through you in at seeing do revenue And of

Scott Donnelly

We're XXXX. awfully looking in don't here ratios at Look, know. I strong

we'll say, hot does, through big a let's production awfully continue tweak does, another go continue that more, our year. whole be up. to reasonable our up through see see us that for would course it levels it I'd robust. but keep If that's as just think I whole stuff If backlog that But making up it's and just I plays We'll we'll is the be has to build. we build, And obviously, a delivery remained can to it. sell love backlog year? it expect, out. is strong do Look, going of how to – that then an we'll be something great. know. on Certainly, another to So, eye it I'd year. another don't levels some we if it the

Operator

follow-up with And from is of our line the last question George Shapiro Research. Shapiro

Noah Poponak

talked the to about Scott, wanting third be quarter, you year, X would the have than a little bit less deliveries quarter the fourth than the but fourth third. I quarter them being level expected know to load this I bigger

pushed deliveries were that any it fell of that's a in as into got Or there So, that? XXXX just that's out result what future? how the expect and just we

Scott Donnelly

not that be like quarter, think, a more how we fact the George. but to every out, same the that's No, number fell linearity. I look, there's It's it just obviously, going lot

If and not right and get you run business. end it's of to quarter, again, you having the contrast of a to healthy back at tons third then can big of fourth deliveries a going this lower a way spike quarter that very our

we're little point as or continue flat the think So, Okay. on this would at customer sequentials? we new to the go and totally a what we delivering bit that's going forward. be to do But better to like I in we're dates, game, to

Noah Poponak

that planes to year be You do to this decision a make to able you kind have the half have year? do you'd where of of what's time lead the or the the is What deliver first lead to need? time more

Scott Donnelly

these in of try are ramping to and flexibility the times a lead. through. those about kind suppliers their as some that those But supply XX-month of in of little being limits in to in us level or cases, to some that. there lead two down go levels, longest chains it the on always gives what look of things another with go some work obviously, are, to we at longest sort we to to so mitigate things, we've Obviously, XX George, Look, talked try more

of change of so of we those XX flexibility year look, a But, that it's timeframe. to of that window, obviously, longest when six-month hard have some like make it's we in we'd kind some inside we have be, sort much of But to we've where of items, tried inside is say mitigate right? So, a window. room to XX to bit wiggle lead that really months little

Operator

gentlemen, replay at ladies at conference XX will after for And and today's XX April midnight. Eastern AM today be through available

X-XXX-XXX-XXXX Conferencing entering XXX-XXX-XXXX. using system dialing And are participation International for conference conclude X-XXX-XXX-XXXX, Thank at any the That your and code AT&T You you numbers today. may those for access XXX-XXX-XXXX. code may your by access entering XXXXXXX. participants again Again, dial access replay the Service. AT&T does and the XXXXXXX. time for

now may You disconnect.

Textron (TXT) 27 Jan 222021 Q4 Earnings call transcript