Textron (TXT) 27 Oct 222022 Q3 Earnings call transcript

Company Profile

Participants

Eric Salander	Vice President of Investor Relations
Scott Donnelly	Chairman, President and Chief Executive Officer
Frank Connor	Executive Vice President and Chief Financial Officer
Robert Stallard	Vertical Research Partners
David Strauss	Barclays
Sheila Kahyaoglu	Jefferies
Seth Seifman	JPMorgan
Peter Skibitski	Alembic Global
Noah Poponak	Goldman Sachs
Peter Arment	Baird
Cai von Rumohr	Cowen
Robert Spingarn	Melius Research
George Shapiro	Shapiro Research
Kristine Liwag	Morgan Stanley
Ronald Epstein	Bank of America Merrill Lynch
David Strauss	Barclays

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2022 Textron Earnings Release Conference Call. At this time, all participants are in listen-only mode. [Operator Instructions] As a reminder, today's call is being recorded. And I would now like to turn the conference over to the Vice President of Investor Relations, Eric Salander. Please go ahead sir.

Eric Salander

morning, good and Brad, everyone. Thanks,

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

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

share $X.X Relations billion, presentation quarter Manufacturing can adjusted third in With $XX for from $XX last profit turn third the be year's flow on section cash Investor the of continuing in million the the quarter totaled of third Scott. was $X.XX call the in Segment quarter our from XXXX. an earnings quarter, million last per quarter Our quarter basis was $XXX from quarter. Income $X.XX operations in pension were up share, before million the to quarter. XXXX. up contributions year's from compared Revenues website. found $XX call the of million $XXX over third million, I'll the up in per that, to

Scott Donnelly

mix third challenges. of Aviation revenue generated aftermarket good strong XXXX And quarter our higher operating on quarter from the Overall, chain supply lower businesses segment we XX.X% morning, had across last net slightly as a reflecting inflation. in of profit, quarter with pricing solid profit higher compared generation favorable ongoing despite with everyone. manufacturing cash to Eric. margins third volume Thanks, X.X% year's revenues a labor up net and

million aircraft, the impacted performance from experience last in as disruptions chain year in delivered products down at year's jets that jet two agreement our six large and XX quarter have also fleet third down We that earlier we orders we expected expected week XXXX we from included year continue delivered across XX deliveries XX XX to additional flyExclusive aircraft order turboprops Longitude year begin last we and to its backlog Last strong exercised NBAA, in quarter. also production schedules. GenX announced expected with commercial throughout in with an XLS the its In the five demand turboprops XXXX. even with eight solid see for deliveries occur an quarter. to the growth $XXX of the aircrafts continue resulting CJX+ in in in supply XXXX. from deliveries to to We purchase to FlyExclusive option and up

aircraft options an revenue. military begin lower We At offset aircraft and also Fly with the in XX with by higher had partially deliveries revenues additional for were for expected an agreement Bell, on GenX XLS to quarter four Alliance XXXX. down revenues commercial in

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

we continue commercial the all solid During to see demand quarter, across our models.

Vertical the to continue slightly we announcement Florida Moving Textron in await a to Future Lift, were revenues U.S. award Army. lower quarter. systems the contract in

program. U.S. with that announced Systems support Aerosonde Chase for begin in to expected provide was fourth to provide Services ATAC the are During F-XX to XXXX. five-year recently services quarter, Flight site contract contract the its the a a maritime also awarded IDIQ on Navy operational

the Vehicles. the higher global quarter in favorable and quarter both OEM higher higher principally were the related Vehicles while to we to shortages. to chain Moving pricing compared year, prior continue the experience industrial, saw in Kautex, order Kautex at Specialized auto supply as revenues Specialized and driven volume disruptions revenues we by in

research. In we cost which week the expand option model the Also include unveiled development Moving as the achieve look at this platform. pilot is a will to seeing activity we Aviation, eVTOL training like Nexus increased NFA training we're aircraft. our NBAA, [indiscernible] our future, order to to Trainer last new aircraft low for we work Alpha to

up, and mobility, long-term underlying Our with investment the in aviation, supporting development special for our are end-markets in continue wrap over ongoing Textron's air general urban we With our in see our strategy updated to strong cargo challenging with to I'll reflects well To turn mission executing design research sustainable that, roles. Frank. demand teams to the offer a aircraft family call environment. and

Frank Connor

morning, good everyone. and Scott Thanks,

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

quarter, the million down related specialized million $X million were the higher from in $XX $X Textron lower offset principally lower partially loss volume mix in was year's million from $XX million, in a volume $XX Moving due million, down Finance year-ago $XXX impact foreign down $XX the Segment $XX million quarter. $XX for revenues spares revenues quarter from $XX primarily quarter Pipistrel rate was quarter last higher due in segment volume military $XX to Systems, Textron profit of million $XX HX segment million million million aircraft and reflecting XXXX was of million sustainable million from $XXX to to last initiatives due third revenues million million primarily $XX due the $X.X lower offset fluctuations. million Segment million. million were year's to $XXX from the and and revenues and favorable profit inflation. by mix. last primarily program of of segment net higher $XXX exchange third an of at Industrial the from down Backlog Bell, third revenues lower quarter, from ended primarily due mix segment impact billion. by was Backlog offset was a up were pricing $X and last the of vehicles pricing and volume were up unfavorable $X revenues of quarter, the by operating partially at of which $XX favorable $X of billion. volume from and mix. million commercial primarily year development to Segment ended profit of results segment solutions. of and year's At $XXX third million. to and aviation revenues $X reflected profit the million were costs in eAviation to

net million. corporate profit was were $XX million and interest segment expense $XX expenses below Moving

flow we pension flow up was the cash contributions In $XX manufacturing pension Year-to-date expenditures $XXX XX%. we million. from third cash wrap Year-to-date about repurchases shareholders. to approximately full-year million. be in totaled before tax Our last up, and full-year shares returning capital in XXX million before $XXX totaled expect will $XXX repurchased be X.X contributions about rate the share quarter. million million quarter To now manufacturing our to cash $XXX million million, quarter, year's the

at of prepared flow the our $X million to concludes remarks. range of are to earnings our share manufacturing prior we outlook. be our before guidance cash contribution share. pension we to $X.X to per per For from billion, are billion $X.X a increasing guidance That our Also, $X.XX up a full-year range full-year, narrowing $XXX

the questions. Brad, So can for we open line

Operator

our today line go And from Stallard ahead. the Of question Vertical course. with first Research. Robert comes of Please

Robert Stallard

Thanks much. so morning. Good

Scott Donnelly

Good morning.

Robert Stallard

some than from to a into you lower bit whether revenues and what in could pushed right? we'd experienced if what wondering questions Systems supply it more bit the has quarter, my of go but in issues if and was detail Aviation the Couple you it me. the May quarter in were were perhaps I third a with numbers wrong, chain be looks was like this anticipated deliveries

Scott Donnelly

the make managing to to guys we've volumes deliveries challenges pushing up think continue to I say, a go continue have through course to resulted right, have on chain to in number aircraft continue into know But hit that. to ramping production we we'll well. we and that. the you supply safe Robert, as of the And work Yes, by do been we ramp that's as of been year, our that work we'll XXXX out our that are hard through

strong So, has and doing Aftermarket difficulties getting we've some general I'd been high by case labor around part utilization driven picking some some strong demand environment. impacts. to but is, very see ramp also up in seeing we're continuing reasonably very But parts, had critical sure for well. say

Robert Stallard

the division your division by for expectations guidance So this year? Scott, impact does

Scott Donnelly

track what that. as Well, million Aviation probably expect Robert, think call, we're going $XXX on on in last still the I we come think before, do originally guided, I about is we to below to we've said

has team the think still we'll performance as make margin strong well. I executed

but I well. As market, tough but it's they're to very a said, our executing we're tough situation,

I the top side, we'll on the on but line. little be late think So solid margin bit a

Systems, I here, see little was you we to that start as expect and had of We into mentioned, obviously into still bit they're that a Systems flattish. think at continues I we you'll year-over-year that think close. fourth on pretty Afghanistan. I some impact business get well also in But from the quarter XXXX. mean, slight to growth

Robert Stallard

Okay, one, then just a Frank. technical

big line expect and year-on-year, of going other that what rate run On forward? the decline on we should corporate sort

Frank Connor

so think $XXX probably million I we or should Yes, year. think about for the

-- that quarter some running at that in depends share level but obviously lot higher a we've price, of zone. So in a of fourth on been that the

Robert Stallard

much. Okay, that's you great. Thank very

Operator

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

David Strauss

Thanks. Good guys. morning

Scott Donnelly

David. morning, Good

David Strauss

in from at we impact energy in an had How given about your euro, moment? think of the dollar Europe, there can maybe about obviously, Scott, kind the you also should pretty the footprint you FX we on about you a big perspective? feel manufacturing should impact, things think And parity there? touch the FX how quarter how

Scott Donnelly

our FX manage obviously expect to I obviously, way through in And, the continue, we'll Kautex but we dry primarily that Yes, business. quite been our that. has mean, a

factory really point. at the seems in front, the of this here than what is think they footprint hitting impacts that expected situation just driven be the been volumes, OEM hasn't energy had issues energy winter. most around reading Europe heading on the auto actually been lately Most I'm into better I by bit we've in it their of a seen related to

energy. on It's go they're continuing in based So going we IHS terms to that any that of had impacted. and really these more auto forecasting of chain think forward. we other look, by to we volumes their off manufacturing yet that on And kind issues haven't how of just back supply David, about anyone's data, indications going

saw we So it's a of sort looking mid what year. was on some volume we year been disappointing has this growth right the year But high probably like to clearly, achieve. top terms next of forecasting thought is growth originally the in now, of IHS single-digit

we the So that's business European how and footprint. including the the kind of volumes think about

David Strauss

guess what on And a it. Thanks. to Got you now Florida Thanks. Scott, to looking your you're incremental spending decision? year of carry kind and I kind for of update rest on And the at are for the of effort? your expecting continue timing, latest

Scott Donnelly

Sure.

the is long making a we doing we we're say we in the guys there's sure and probably latest we making I timeframe. do the not And about keep that's incorporated around continue thing with and keep other date, So program. Obviously, to progress. to it's don't impacts time, that doing forward some guidance. And by got uncertainty hearing we've would thing from the an right exact through programs obviously than over know as some team good were the you for been work that, that feel by customer. very worked we're people. like were right comfortable but make is November where our the I And plan the we there this. the we're still know we anything program, the to pretty total I for supportive think any mean, we on a going year Obviously, we're sure still this, uncertainty on our together while the

seen we'll on guidance, that think we've FLRAA I the delay. that we're comfortable the inside despite that So land impacts

David Strauss

much. very Thanks

Scott Donnelly

Sure.

Operator

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

Sheila Kahyaoglu

Hi, good you. morning guys, and thank

Scott Donnelly

morning. Good

Sheila Kahyaoglu

sort Just And impact can for of do with you a XXXX? last remind or us associated Scott. investment Bell their R&D scenarios potentially follow-up of think without without on a look FLRAA about FLRAA? the like FLRAA the FLRAA you What would maybe point, the Bell How win.

Scott Donnelly

very, a work in So will I Because FLRAA. obviously, Bell our good stand we're think about very don't process, think without the let product a performance of here. process we through just is the through place, rigorous I Army kind and going the of

them on that, bit, XXXX, activity that it program. down program been I and suppose. more both the at actually we'll with because bear R&D the the a let this And on pretty bullish So thing had FARA we'll we're has On But of crusher play leave out. we've program. and FLRAA the little

some So extend way so. the to seen through even to and the we've going relatively hopefully think of period FARA of FARA here, thing this we've there. some to be on fine impacts years the we'll compared a I working say on working time program clearly been with our all is short it, like of that continue and the delays, delays We're

Sheila Kahyaoglu

do 'XX think Great. for total? at supply deliveries, don't FLRAA. think about we How when we does to you in like, jet how aviation, it But mentioned does chain. switching helpful. And 'XX? linger into you look And then deliveries without That's about linger glad long gears and Bell that year-to-date they're

Scott Donnelly

I labor a out originally to the through get based been to Look years we going delays. going number, number to on production have ramping we're the XXXX. been year, the starting the lay that ramping we've of and that I good Sure. activity hoping the it's that. that we're were question. planning clearly to increasing of these activity be some the and factory. all think mean, we've But hours keep not way we been achieving to going We're on in And through just

expected. saw timeframe. guide We'll not So yet, similar 'XX not we 'XX when increase XXXX we it's that what reasonable in the the from incremental to ready look a volumes on from at to volumes in see had XXXX, but you in we're 'XX

Sheila Kahyaoglu

Great. Thank you.

Scott Donnelly

Sure.

Operator

And our was from next the Seth line question comes ahead. Seifman of Please JPMorgan. go

Seth Seifman

everybody. morning, good Hey,

Scott Donnelly

Seth. morning Good

Seth Seifman

I about question, to we think decade. supply I kind that further had to make go. of been that aim when been there. that focus issues. about double-digit anticipated moving on think maybe follow-up Scott, ultimately might able to I more it this head before And from then higher where having more and would expanding low as plus backlog, XXX chain strong the you of you here, margins you've that when Kind XXXX sense for toward And the range. maybe deliveries kind in XXXX. keeping guess even be the assume about build mean, little steady just to pace, backlog level from the think to level, be on back the of a you Would mid a that delivery

Scott Donnelly

volume think all, in had be think First obviously in to We the 'XX are we to get in reasonable of will to of Seth, 'XX. have than what like I but end there probably -- your the hope more would on that by it's here thoughts correct. there near-term 'XX,

of timeframe. XXXish the should 'XX we So to back kind number that in

but for Beyond we've be be a mean, that about, and I slow kind for we better here with that -- months that's talked of it's yes there whole to for our timeframe. around market in out backlog XX better that, right. certainly ramp, see long we'll to steady continue strong going watch it's it's demand environment, for it's continue that the then think ramp, our better like marketplace the company, as operating we I to in we've of backlog the continues be think better in better visibility a kind customers, strong growing we'll as to it's

robust. order now, We're out activity seeing So to that XX a plus demand right of in be that's the timeline. of continues sort very lot

the going starts where just backlog or the see we ramp, demand obviously, on And taper back case for as can considering that XXXX down. can is being slow the I match production ease the meet off where market through certainly is so we but so. don't and that environment we'll to to the And

Seth Seifman

or next strong Okay, 'XX? either year. things great. we into tailwinds And headwinds P&L. flow, about there And year, very might just when cash what on cash assume other this note heading you'd to follow-up the about you than think Are any

Scott Donnelly

customer I last out deposits impacts been. benefited and and we've good working But not with line of of activity this kind certainly from management we've are of or nothing from year, we've had capital other year. like obviously there's where think, working a kind again capital -- cash now We again strong so. and just really that

Seth Seifman

Thanks very great. much. Okay,

Operator

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

Peter Skibitski

Hey, morning, good guys.

Scott Donnelly

Good morning.

Peter Skibitski

Hey Scott. a to on dead little I just wanted bit the beat aviation. horse a

fourth a Just lower because still hockey is even applies the a number stick pretty there in little at a bit of guidance quarter. good

labor wondering the need the parts is you you house some just of do up? the I'm the that think So kind the Or risk have Do number in that and ramp? there trained fraud. and still to on assessment already given engines risk you

Scott Donnelly

look, all working Well, number, some always risk guys day. right. components. this obviously we're to Peter, the there's are I'd think our out But of heck -- the say every I tracking critical They're

we pops up of think were to here a still things one kind up, think, we've in to terms there. shot pops pretty get over gave that some mean, risk you you labor, I of that if part be control under is it? between good we but holding, think particular a missed few supplier and I So around a there got it'd guide the issues we get told can of of pop probably we something, $XXX Yes, it, few you. is the still in is all number aircraft original And number and million that our getting every that a good we're that challenges up guys I we, shape I day, the I

guys day. you are working every So

any But over in it. in. risk I our think folks we there Sure. it's And think we're, could guide. all I environment a be are some good live

Peter Skibitski

I Okay, appreciate. now,

NBAA, health the of there. down sure the of conversations guys the how of the kind how on the obviously, I'm is? feeling you backdrop kind I'm Just was base, same about, of of go. aviation, what the one wondering net segment, are follow-up your assessment customer post your And conversations kind part macro just

Scott Donnelly

I'd say very positive.

online. we're some doing orders see continuing new that, of customers think coming refreshing and ways aircraft continues out, market, people charter seeing I of the refreshes, the which in obviously, obviously, very but they're historical are putting activity bring additional of some to level industry in deliveries we're are into the they're fleets, fleet to our to kind corporate that have assets motivated customers, flight fractional their

in I also strong hardly all all, below put really backdrop right, that and say the we're historical of I norms. mean, against bubble, delivery it's kind about, again I'd still volumes are of maybe back even a So jet talking

there's big euphoric, refreshing but it's I strong, pull-in, is this the think are critical. strong, bubble just and is our fleets volume investing this don't We in market So, see don't people which bursts, aircraft. and is right,

Peter Skibitski

like I the to think is be exposure I used was it was case? to citation is still going volume, know XX% don't limited, still to your only, say, XX% your to fairly I Europe that it of

Scott Donnelly

look, XX% U.S., normal roughly maybe around. that's are it I kind U.S., XX% International, what And historically, seeing. probably what seeing seeing International. XX%, mean we're lines jets relatively XX% seen is. We're from Yes, the are like typically we've way of the other we're [indiscernible]

pretty versus news that domestic what demand of historically. international good strong. is terms So And is we've we're the are models across fleet normally seeing kind of operations the in much that terms mix all in of the here seen

Peter Skibitski

great. you. Thank Okay,

Operator

of the Poponak comes with Sachs, please Noah from line Goldman question And go our ahead. next

Noah Poponak

morning, good everyone. Hey,

Scott Donnelly

Good morning, Noah.

Noah Poponak

for you Scott, XXXX what now jet Cessna units? planning are

Scott Donnelly

a we give specific never No, number.

million so. of really all probably And line, is looking top the guide. deliveries off that from think original virtually at our of I XXX about you're jet

Noah Poponak

Okay, okay.

that does in if can I we rate repeating saying, you're that. think it implies approximately? back heard then in about growth units, And 'XX that 'XX into correctly, saying, for So you're

Scott Donnelly

Yes, that's good.

Noah Poponak

how then you and much Okay, 'XX? do visibility have beyond

Scott Donnelly

midsize mix larger good through the now in lighter visibility. we're towards I aircraft, of and have out Well, end aircraft, the certainly of 'XX, it's are most pretty well 'XX. mean, of into 'XX, XXXX and mean, I we right the frankly

operations. kind a chain of in do the we're time, this And terms without we've to very is obviously think visibility a some efficiently of obviously, very the we'd the terms business. little having us in visibility again to more to we in supply in of like So need backlog place, but long as pretty of obviously, challenges, I run helpful the of had a good the

Noah Poponak

Okay.

in structural backlog revenue the that's major and excess guess, now, running, all bookings of in to hang would even continue in the where the further. pretty business. of far in bookings I which and the positive the are if around zone the kind really But So they're they run build you'd change that

to there going kind are the in same And So, get point where elsewhere Or is macro everybody's to every wait going when thing has just chain it bottlenecks, of the to do far any? do you too OEM long? and too customers the that's have of level and same the is supply boat. with

Scott Donnelly

-- know too I -- right? think around. in other is equilibrium like, don't out think gets a so, I've says, that some I this aircraft OEM I No, But boat, you mean, is, supplier it. just the right not hey, this not got it Everybody's when said is sitting point far. where I same that

fabulous is cash day it's great fighting supply really, in I stuff good backlog. I'm and day But well. every ask from chain I apologetic about very hard it else businesses a think generating performing as through driving really very do. just a They're of it's lot, sure great right? and for sure what day. I and backlog, an these there's obviously, I'm perform strong to to not cash And are I not every a them of would strong margins, and kind profitability it's with this these I this like feel flow. look guys condition, is kind standpoint. we'll our issues be how to that. guys, every visibility, hard strong margins, generating being watch. this look need So I It's guys industry think opposed mean I you mean dynamic, is don't

Noah Poponak

sense of price price that ago, increases And a the done year-over-year to Are you assessment? Great, that accelerate now XX now in the in you when the increasing the a get I because XX, the than change just you business. big, weren't terms actually more, actually months you strengthened, of first on price were rate this lastly the in build can fair demand that that strong environment Is you've early wanted backlog? pricing? so market

Scott Donnelly

I think Well, last I sure I day. stronger first and or am the do pricing for I obviously. I derivative competitive months this market But yes, guess, would sure gotten look not don't do. every the on has it's the as XX changed so market, over

competition think pricing whole pricing. matters. But mean I So and what is doing I seen has stronger everybody industry the

you at getting we price and say, model we've and on answer by about, this of it's give of 'XX. inflation, this thinking the about can kind 'XX, sure, again sure So, going obviously I on I'm we're to as that taking competitive and the on making a simple focus not lot of And and very with continue contracts when model a advance not aircraft on are in 'XX, environment what's the it's would in much I slope on think obviously start looked basis, but curve, strong. a we we're

think terms here accordingly, got make price so you've make inflation we and I in sure and assumptions there are. of And to appropriate that between

Noah Poponak

you. thank Okay,

Operator

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

Peter Arment

Yes, thanks. Good morning, Frank. Scott,

Scott Donnelly

Peter. morning, Good

Peter Arment

Hey, Scott.

disruptions, chain all year. supply about obviously, been You've talking

aviation, you components out, biggest in on things Is a engine could there shortfalls? just engines. still shortage -- the you or provide that other the in of You've engines of for experience had would maybe other ton any got or chips a you and color, like call you lot are

Scott Donnelly

knows, that's recovery mean stems engines kind one that's to us as this that Peter but sanctions, think issue it are important Ukrainian strained. mode. had to that I model is, everybody of in I particular And an back Russian

good for suppliers bouncing meet I of that happens. just our nice they've able have that, our back. there's, done Peter been avionics everywhere, to stuff But frustrating overall I Garmin say It's think feel really folks, we So sort part job. about to is, right is critical a us, it's deliveries. the

concentrated managing be probably semiconductor they're there way, So of that terms in the most that'd highly risks.

I it's important. job. this Every is think But is problem -- in this business, a they've part nice done right? So the

I world So the we up of here the or keep so. live an nine certainly working are things just engine go it's these next the there's six, things or like issue, pops our that in manage think But resolve in. guys to and it's, was some And itself will each months used They kind it. week that every just they up. thing pop

Peter Arment

It's Frank any quarter was up tell just aftermarket could what us you the just on helpful color the and quickly, and in Thanks. comments pricing?

Frank Connor

Yes, aftermarket remains quarter. strong. of the total volume XX% for It was up XX% year-over-year,

in see of kind business. really, and continued volumes strong the activity we So as Scott buying said, strong therefore

Peter Arment

Terrific. Thanks.

Operator

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

Cai von Rumohr

much. so thanks Yes,

aircraft gusher you've from on the a about XXX goes came deposits year, had book-to-bill and big about about cash thinking source year? back this million How of that to that think next from goodness we much cashflow if how flow, So in should such X.X?

Frank Connor

have kind growth of seen seen deposit these cash inventory to a some of break of supply deliver. and our as bit chain we not that the offsetting We're mean, I activities, kind items, had out issues, little slowdown the in we've we've ability going separately to

So offset. Frankly, Bell, military strong at above a also aviation there programs kind from benefited commercial on as performance strong of commercial demand Bell. has and strong we've book-to-bill with But benefited been we the from some cash at one that.

kind past talked of, the all over cash that. business about time been be generally, around hasn't in it the So one-to-one flow wants to We've to right. profitability,

when of do at. from and strong lots towards kind one-to-one, And cash we performance kind last it of but factors, migrate year depend it'll a this on rate, slower to So relative to year we booking get have we back of certainly will benefited kind as that. that of

Scott Donnelly

I would I benefit right? commercial of emphasize deposits you've -- guess, conscious enjoy strong mean, you aviation. I this, think that I Look, we're in that a here with

else also all seen But had managing do to change has demand And you're strong some managing and of and here. working business, anything capital very which in CapEx the you that and things. sure making fundamentally Bells of business also the terms commercial you in don't those

getting but well customer one-to-one. job I businesses So that. benefit a And you're we're of over for cash, I don't and delivering of think benefits their positive activity on then the of top are of good sure managing a this, doing because enjoying that's the

now. that's nature the of where right are So we

Cai von Rumohr

Terrific. And about goodness, cash? the given this thinking extra how are you deploying cash,

Frank Connor

Well, same talked as we about.

that's ended said, As $XXX We year, number. an Last that about of been of bought up repurchase we we've million year-to-date, kind up XXX active of low we million from repurchase. stock. year's year-to-date share last

so And similar X% -- rates here and back about been expect of least annual go buying an basis. forward on types kind year we we've stock on today our a on sit of of the at we as for basis, would

And thinking of be good kind type a that rate rate is about. of so to

Cai von Rumohr

you Thank very much.

Operator

And Rob of line the Melius Please go ahead. Research. our Spingarn next question comes with from

Robert Spingarn

Hi, good morning.

of margin been wanted other Just about segments business, that double-digit for a year. turn it's couple being But a to but the moment. systems year the to you've this last a outperforming past, talked in and low

the trend mid-teens? going So stay little there? it in talk to Is bit more a can we about the

Scott Donnelly

I guide we're Look, quite well. that the a components good always some think business not to of -- year. I But it's and it's it. really that question, ready performs for yet next mean, has

there'll continue. a inflation reprice government you guess For be fixed see still everywhere, pressure so I you'll instance, those, think this some price Where helped also on contracts, I right? front. new and I that can't there's on of expect strong execution, But that would us a programs overall deliver think constant flow and margins like I double-digit strong to that which has there's

Robert Spingarn

call these think Okay, vehicles. talk the was about clearly industrial there? and forward other specialty trends I And that Can you we sticking strong. Scott, businesses, with

Scott Donnelly

Sure..

the specialized business achieving I There's pricing the and businesses that that -- is equipment like into golf obviously -- well. through PTVs or seeing doing some think there markets whatnot support and vehicle strong segments were directivity very strong. periods things as that Also back robust specialized those around in real come that they our is of are hits COVID that well.

it. in Obviously, team we'll on steady nice have also but chain we lineup, a that I business, work the great has product the see that time, we done improvement. team's through that continue see supply think I that. to challenges And a think a all job and

Robert Spingarn

sensitive. haven't this I imagine you that evidence that is really business? somewhat of feel And do How business you any would recession. that seen hitting

Scott Donnelly

Some others. are than more sensitive

keep So because lower particularly close they you at but think than chain we those very on channels world, I still when challenges. powersports are of in much supply eye the look absolutely, that. Inventory are a levels typically very

the municipal us. in resilient pretty the equipment, how recessionary I of stuff, a even which are business been and And markets, support of larger at period. terms that that ground is in well lot piece, these they to we positioned carefully, which healthy is relatively pieces watch perform get us. historically for of golf, I those think think have things I -- for you I But but absolutely need very So it look to those piece very, particular when think level, you Obviously, recession small a think a much very we're because in a is sensitive.

Robert Spingarn

you much. Thank course. Of very

Scott Donnelly

Sure.

Operator

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

George Shapiro

like you on any Gulfstream high chain say as seems can a it supply to why? than Is business your the morning. Scott, say issues, affecting end. it's like, there differentiation more Good Yes. at

Scott Donnelly

and now. you of extra I don't we missing guess in, George. has I all the have look, haven't a We call I guys live the ones. some right? world I he if parts think could challenges. the -- see I I But this a of list we're I no, mean, Mark, have again, is right

this. nice guys I our a think through job have done

think high have the our not the there. with don't are. But it's It's to know be it'll we the way -- how -- quarter. it's be end -- and of popping with a part some some stuff the commentary risk strong up explain on difference I we'll I between some to manage without, a here versus fourth fine. you going where where But we'll through,

George Shapiro

given Frank, changes returns? you the DR in And Okay. we're seeing on can big next comments year, what provide pension see and asset you some for

Frank Connor

a be Yes, fourth and we've expect the but headwind. should it for lot to and of everything, obviously, work don't do a us. in not to it be headwind we got We're quarter numbers a calculating

George Shapiro

carrying it a still saying How of one. FLRAA cost then delay of good margin Is look one been pretty because you all that has much it all? in in you've Scott, the Okay. in Bell people. cost was the terms Can to last the a to been And quarter? the Bell at quantify quarter, you this

Scott Donnelly

Yes, But those about on ramp can performing well continue I exactly or it's game, our to said, you lot commercial strong programs, based obviously, say think aviation, robust And bit. the strong guide. guys FLRAA something And business. are can't like, the toward business like And where for original very But historical a seeing live had we're our the year. is our to part to -- little a at very and under And see quantify obviously guys talk I I why of also Bell lower announcement within was are of absorption. our we wouldn't demand. we'll Georgia, commercial through. kind but think a suffice which That's seeing the the this And quarter to we I it's asked. helicopter managing commercial it offsetting the on think, the certainly be of stage obviously, it's we but down military we're expected latter And the side. continue well. expectations the quantify we that for we on I contract way number, guidance think

George Shapiro

much. very thanks Okay,

Operator

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

Kristine Liwag

you from book-to-bill corporate strong at mean mentioned you're incremental I is solid pretty interest session, Scott, X.Xx. And morning. pretty buyers. that seeing orders good pretty Hey, strong and

Is from your increase, impetus conversations order? they the and jet? your And incremental customers are it sensitive replacement customers from the the customers. with So environment? What's new to how or potential for capacity biz key financing

Scott Donnelly

Well, orders, aircraft. to fleets bought, mean, to corporate their replenish have quarter Kristine. there the it's going obviously, they're -- customers of I in a all bit we mean, out because of turnover placed so that some we've I

they know, corporates, -- out you so or the month As two-year looking on they're XX used timeframe. to that of sort

they plan As fleet their refreshes.

are there times their lead they're the that now to, right and in So something of aren't plan. not fits accustomed kind that that

we are coming And see activity, using charter of operations. new seeing fractional are certainly a yes, seeing are we in more the But we aircraft. people people that continue that were are So normal there to are still or lot of activity. also whole that new some the that a coming market buying than -- we demand new either into see just

to well. as continue customers those we strong demand from so see And

again which is the industry. is So think board, for across it healthy very really I the

Kristine Liwag

production, completely SOC, you're for you Weapon gears, out and is years, only your owner that past, out Thank like exposure, like support passenger only of your you're the and you no longer an albeit have in electric to of certified seems and aircraft maybe color, the had limited European use, your switching business, the -- support basis. and Fused the the looks Weapon on portfolio it now attractive Fused more it Sensor for past completely Scott your to, me of it Sensor ESG few the on

think seeing of that incremental recognition and And how the evolution? So are any are do interest of portfolio you And you investors? seeing European managers ESG shift? from asset you

Scott Donnelly

I wanted don't have exposure. the question, it's the good company, in that And know, exist those And doesn't large a know in of funds specifically, invest not that historically you as SFW to part Well, because Kristine. anymore.

funds think also oriented they obviously, in a a there business that field. to going of a overall an So doubt, out frankly, area equipment I right. we I and frankly, that terms particularly of way, have to more care years, future of continue the in you're mean, a support the lot we're result and towards deal going that leader that's businesses, electric is are terms I that on in ESG trend companies mean, big front, side over we've very transportation. and issue that are electric of are pioneered without think that's that investing particularly strong we're as story. not to see vehicle in out think it's, a investing And an including equipment, happen. turf spreading very And in electrification, there to is certain Pipistrel be across that in aviation going our ground a good I

So specifically I to and we're help make will attractive funds. obviously, in to funds our we consciously, more criteria. ESG absolutely can't But part, think that us strategies have on engaging the speak I European that

Kristine Liwag

you, Thank Scott. Great.

Operator

please And go of question our comes with from ahead. Epstein line next the Ron America, of Bank

RonaldEpstein

Hey, good morning.

Scott Donnelly

Ron. morning, Good

RonaldEpstein

as looking down walk focus you bit about of not opportunities and of you Force for Florida, a road But some helicopters for then Navy could beyond but was there. ton on the There's been Florida through reasons. is some of talked Air the everybody the a obvious guys AUSA the

opportunities you kind are So those I was through if of wondering beyond Florida? of could other walk some that

Scott Donnelly

trick was everybody Sure, a Ron. absolutely, I other on. lot one there's we're a Look mean, We a But obviously of Florida, outcome very, the right. of going mean, pony, right. in I that about you're stuff lot hardly Florida. asked interested very

maritime do replacement what of in now of thinking right Obviously, the when strike, they and you the think about think AOA aircraft about with or Department their programs. I like on future going to I that we there's activity in space active our operate are think that mean assets V-XXs these today with obviously up is that offering, can very which they tiltrotor that aircraft and them, keep need and is V-XXs. services attractive Navy

the I is think we couple years. and relatively analysis here on, that'll space. solution good These their I they're So feel are in programs a more that doing to say like lead in next three the it's acquisition early tiltrotor answer two, activity alternatives,

the speed to programs Force, we class is, of today, higher those even public been Air aircraft we're on we're very those it'd Force do with be XX XXX Air of they be speeds for, So has as in to sorts close of want beyond frankly, fairly engaged talking kinds what about see vehicle, or obviously. the programs. right? So highly in

guys that's are program Corps our form one seeing Hawk that opportunities. of in So Army. those I the and Air And of in doubt for in what with will the obviously Force the and Black no opportunity to that we're see engaged there's a think huge replace highly fashion similar you class aircraft, programs that Navy, in the Marine

RonaldEpstein

the then not? or you of to that than how in there businesses thinking And picture portfolio given couple any shifting it. question. And maybe just was Cessna look years product place a back airplanes, a the need to development, a that Cessna. ago? is place think are you you refresh new Got When it healthier do at you about gears Bigger of

Scott Donnelly

couple I look, set mod we have very launched We've of programs. Yes, these of robust a GenX, a GenX think refresh programs.

really, regular critical it's frequency. more out that of have be on think works. to fairly in We those really the a We rolling

So the we within announced. But still under Denali in the on the sheet have yet clean is that right that are front program, which work now is obviously, going couple haven't a we works development.

look So our jet both I of I now. think love I if you mean, there's turboprop, lineup activity. product at and robust a level right

been think obviously raised just homeruns production have career sky in getting great in, the the the to longitude, is I getting in market, kind demand. latitude with of

us. a the -- Denali coming product. be years. and for similarly will in of with homerun the a these be to line going that's programs product couple think is, think I here I refresh the a And great sprinkled

RonaldEpstein

you. it. Thank Got

Operator

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

David Strauss

about taking and be how thinking I program kind just wanted to ask awesome? that Thanks. of headwind the runs here H-X for follow-up. Thanks about rolls from to that and off what the Bell of should Sure sort as we

Scott Donnelly

wrap in It's about the sales. program terms up. H-X U.S. Sure. to is of record a

those of years. ramp that to the couple We to will clearly still FMS next continue here next David, have Service programs won't that over of under are no question, but But here production, couple down years. some ramping the continue programs run. in down program be

David Strauss

And accounts for? Scott, much currently could in one quantify you revenue each how

Scott Donnelly

the plan H-X program. out largely you'll is in our don't look, that FLRAA programs, on program on up a in will ramp David. ramp obviously, fact individual we the the see largely that But down No, replace break overseeing activities based

David Strauss

Thank you. it. Got

Scott Donnelly

Sure.

Eric Salander

completes that call. Brad, Okay, the

Operator

at conference And ladies Eastern for a.m. and January replay. this After today XXXX. gentlemen, be will XX, available XX:XX through

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

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