TXT - Earnings call transcript Q4 2024

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Operator

Good morning, everyone. Welcome to the Textron Q4 2024 Earnings Release Call. [Operator Instructions] Also, today's call is being recorded. [Operator Instructions] Now at this time, I'll turn things over to Mr. Dave Rosenberg, Vice President, Investor Relations. sir. ahead, go Please

David Rosenberg

good and morning, Bo, everyone. Thanks,

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

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

the Our earnings Investor in call our of found presentation Relations website. can section be

billion $X.X $XXX were of year's billion, million quarter in the $X.X in was last quarter. from quarter from in million, profit Segment Revenues XXXX. quarter fourth down $XXX the the fourth down

During to cash pension year's contributions this operations compared $X.XX continuing per the from totaled $XXX share flow before million year's quarter, down last year's Manufacturing from adjusted in $XX in million income quarter. fourth share was $X.XX quarter, per last quarter. fourth fourth

For $X.X $X.XX from before $XXX the XXXX. last was was were in XXXX, from contributions revenues continuing to from share In segment $X.XX Manufacturing cash billion, XXXX. down down share pension million $XXX $XX operations per billion, million as $XX.X up full million, Adjusted income year, compared profit per from $XXX was year. flow XXXX. million

to I'll that, Scott. the With call turn over

Scott Donnelly

Thanks, stoppage results markets David. Good end were morning, everyone. work in aviation segment. XXXX difficult impacted by in Industrial our

IAM new X-year a with contract. on quarter, the the an reached During agreement Aviation

our Also demand in from significantly twin-engine expect Civil improve its Command an continue flow backlog customer improve $X.X by XXXs. turboprop resulted increase XXXX. supported Aviation. . large While the will parts from to and Aviation Beechcraft station strike which the Cessna Air was launches SkyCourier, our new to expand work billion, product market secured XX transport quarter, Naval December, forward. certification the year-end efficiency for quarter, saw our opportunity versatile achieving did Systems global unfortunate, order the the and Canada's by this reduce production King portfolio continued we additional multi-engine in to for of a Air going system, an in type take Aviation steady In of Aviation training line, an million $XXX utility the we

aircraft the in XXXX, revenues. in year. portfolio XXXX, At XX.X% the FARA resulted driving X.X% During saw with expansion a for revenues within Aviation a increase Textron utilization in the of product aftermarket we steady significant largely growth program, growth in continued Bell, the

user as quarter, for Bell U.S. for option follow-on the program -- Army FLRAA and two the During test limited received award the aircraft. option X a exercised

steady side, On continues XXXX. to the commercial see Bell order activity in

For the Bell in year, compared helicopters delivered commercial XXXX. XXX to XXX

The strong to with delivered profit margin. a Moving quarter another Systems. segment XX.X% team

X During representative of the mine for and in from to the a to million million. next U.S. crafts payload mine the production Systems contract of future also ship-to-store the with Army awarded $XXX sweeping total program systems support received award X the U.S. value the the quarter, a of delivery from X value Systems of up sweeping an system to connector lot Sea delivery the for Systems its operations. a Navy contract production completed with Also aircraft December. Command during Naval uncrewed tactical Systems options system quarter, of was $XXX

in At driven specialized primarily and the the end the revenues by Industrial, experienced quarter, segment in profit markets. operating lower vehicles softness ongoing

in year for the powersports At of our investment full the future platforms. $XX.X XX with process the We total strong review the year conducting fourth our XXXX. and quarter Aviation, activity Industrial, and and continuing strategic and $X XXX positioned during well backlog in faced the in in of growth a generating order Despite aviation company product challenges billion the aircraft in businesses the delivered Aviation Aerospace exited while for electric XXXX of Defense aircraft are line. at hybrid billion, company up

announced MX in avionics Emergency October, along product aircraft, in at and a significant and NBAA adding upgrades advancement to the CJX front other aviation Autoland new Gen CGX aircraft with technology the Garmin On Aviation enhancements. X with platform the

the to Ascend the programs. we development make Beechcraft and During Denali year, on continue progress Citation

is program and award testing. on hours towards program has FMS in Army highlights first of engineering the logged the testing Ascend of Milestone aircraft and military and the sustainment B X,XXX on approval program. manufacturing programs. the logged awards the XXX over over H-X V-XX AH-X U.S. August the while the helicopters the of Denali FLRAA hours announced progressing finished flight in year of having H-X of and now Bell, Bell executing in XX development flight for over and phase Nigeria production delivery for and an $X include V-XX prototype build. Zulu Bell At billion

Norwegian steady Bell several year, helicopter throughout to the significant On first saw demand the made pursuits. order State Textron Systems In the Company. progress units Energy commercial side, XXXX, Equinor, including for XX on key its XXX

On Army's Vehicle X half effort Robotic program, the XXXX. development of down a the ahead MX vehicles phase delivery expected the prototype Repsol the announced of Army of in development competitive slice the to U.S. for first Command Systems X of

a the with As XXXX. to first the expected TeamLink and design design part conclude in XMXX phase detailed of to the critical program, of review half advanced is

one develop Reconnaissance expected for two Systems as Advanced in delivery development a of autocannon its manufacture work continued and Vehicle variant the to XXXX. On selected XX-millimeter vendors program, design,

in and the as has expanded half the the operations maritime award FTUAS. commitments for connector shift-to-shore U.S. Navy. the also Systems final awaiting for the Systems the U.S. of to delivery downside with Moving a production decision second contract next program secured on contractual on production award XXXX. Army its fulfilled competitive by

and on aircraft certified At the offset Aviation, U.S. stealth programs. to to allows Moving the for Industrial. year, the continue FAA training markets. to structure exemption pilot its selector to an trainer, focus schools Throughout we challenging end granted airworthiness our by flight which use cost

flight acquired for systems vehicle management flight and During both of Amazilia and unmanned guidance year, manned Aviation the Aerospace, aircraft. controls, digital developer

Looking improved efficiency. and productivity higher at driven product by increased manufacturing to across eAviation, lines all projecting aftermarket and XXXX volume we're growth deliveries and

Moving to the revenue volumes. continue program single-digit by Bell, higher At new with program low as FLRAA we to Systems, revenue pursue commercial strong and we opportunities. growth growth we margins driven expect expect

our Kautex Industrial lower are projecting reductions drive segment we In and segment, powersports for in by margin revenues expect improvement driven automotive of XXXX. TSV in profit largely to cost at production suspension volume the lower and

plan backdrop, investment for from we're development fiscal X% XXXX this manned electric XXXX revenues we our Textron's continue overall projecting new hybrid platforms. up billion, eAviation, for in of year. With At unmanned $XX.X of aviation technologies the and to and about

EPS $XXX range adjusted to contributions is projecting are to million. in of be We range of pension flow $X.XX. before in the $XXX million to the $X Manufacturing cash expected

that, to over I'll the turn Frank. With call

Frank Connor

Thank and morning, you, Scott, good everyone.

quarter. $XXX review of at Let's were reflecting $XXX costs which up production Revenues Textron related segment $X.X $XXX how million strike. volume primarily down Textron from a result facility a of down Aviation. disruptions mix . and associated of was labor the the $XXX Segment prior each the the the higher contributed, from was principally from idle quarter with manufacturing Backlog the strike. fourth from due to starting lower Aviation to ago, resulting included and XXXX, quarter million million the disruption billion segments in million, of $XX $X.X the which of million with in fourth billion, mix profit volume ended and lower costs inefficiencies, the year quarter, at

of partially of Moving to revenues program military as volume $XX by FLRAA offset on profit million offset primarily program. higher million, $XXX $XX million the V-XX in fourth segment $X.X to down on quarter, billion. and the program support V-XX Segment due a $X ago, higher billion, program Bell. reflecting million quarter were volume volume program. on higher year by Revenues driven $X.X Backlog on up the year's volume from the FARA lower last was at mix ended lower the primarily from the

ended At at Systems, million fourth reflecting million Industrial $X the quarter last cost down to reduction Segment $XXX and $X $XXX down $XX were billion. were from in partially $XX million the reflecting segment largely profit quarter. quarter. efficiencies down mix of quarter, inflation, and lower the Segment Textron up revenues due fourth was last $X.X from year's volume. million, million was $X Backlog of from from and million, revenues million fourth lower quarter activities. volume manufacturing lower by XXXX, $XX largely year's offset of million fourth expense last selling profit administrative year's and

segment largely the a Finance XXXX. revenues million of with Textron research million, associated expense fourth were and $XX the the new million products. profit of were development was loss XXXX, eAviation and segment million $X $XX segment of fourth in revenues on quarter in quarter $XX with

we group manufacturing In additional actions. below expense were review $X the pension $XX non-service components asset Moving resulted LIFO million. million. $XX and profit. was provision million. December, was powersports interest Industrial the expenses product was inventory announced million. in million. Intangible for of were a $XX postretirement strategic of Net amortization that And income within restructuring segment Corporate the segment line our $XX

charges With million, an $XX these fourth total we $XX valuation of charge recorded actions, the million special of pretax quarter. inventory in

$XXX Our quarter. the million contributions pension in flow manufacturing before was cash

flow million shareholders. cash million from the cash the quarter, to year, shares, down million repurchased pension $XXX approximately the year. $XXX returning $XXX For prior X.X before totaled contributions we In manufacturing in million,

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

over to call David. that, turn With the I'll

David Rosenberg

you, Frank. Thank

to million. manufacturing about to our range outlook $X to expecting before XXXX adjusted to to per be of earnings We're now be also Turning $X.XX. cash $XXX flow We're X. in Slide contributions pension on million the $XXX share expecting

Slide XX%. Aviation, XX% and margin $X.X is to of to be Segment X Moving to on expecting a beginning Textron of about range in outlook billion. revenues segment expected with we're

we of in a aviation in Systems, forecasting million about in segment $XX a sustainable to $X.X to a XX% billion of Industrial, of eAviation, a be about $X.X we and of XX%. billion At estimating of billion. to X.X%. of margin X.X% X.X%. revenues X.X% we're continued about margin we're to margin segment We're with At $XX a Looking our in to range of At range solutions. revenues Bell, reflecting expecting loss expect revenues $X revenues a range and million, expect about investment of

At are million. of profit Finance, $XX segment we about forecasting

$XXX at income. the of $XX corporate inventory projecting of We're $XXX group, million million million amortization and of expense LIFO Slide pension million provision, interest million net $XXX asset for of $XXX of manufacturing projecting X, about about we're nonservice expense. Looking intangible also

a approximately XX%. year rate effective of full expect We tax

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

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

line open questions. for can the we operator, So

Operator

we'll Jefferies. this [Operator Instructions] Kahyaoglu first And of go to Sheila morning

Sheila Kahyaoglu

talk the we versus Can if the I XXXX. turboprops Scott, guidance. around about about Maybe, as could the start Can XXX off with as implied XXX jet QX deliveries maybe deliveries cadence just it's XXXX given the you quarterly number. in well delivery talk deliveries? Aviation think of you

Scott Donnelly

Well, numbers I the up year, factories are through the the course Sheila, of do coming to we're obviously will recovering. the I'd strike. operation getting out say full back think of ramp towards that the

on the We that's will signs and year, a good, again, and ramp our as we're by up the us continue, enable production early time, I which that the should capacity seeing more the contract is which would as we we see over stability And the coming been ramping workforce, for we're the workforce. year. good some to say shape, of agreement, parts, out that expanding course largely in fairly and driven I have think in go the -- of little through

of through see go as a call, to about going talked margins probably progression in the the we terms significant in also year. we As last we're

have in We quarter of deliveries that will delivery. a have lot been would XXXX here the first

margin they're would course year. levels. expect the and see to to obviously, both priced of XXXX the So through volume I progress

Sheila Kahyaoglu

if about about for on progressing think to just follow that that? ramp. could you think as the QX we contributors I we Aviation? margin that exit the and Maybe rate How about for talk bridge the up Can X.X%

Scott Donnelly

our right? I more of or unusually anomaly, period inefficient with Well, affecting wasn't we X/X We low the we certainly, overhead had obviously X.X an quarter. of strike on the And burdened. current volume. that for took couldn't mean sure, all an the is burden expense volumes with

will as about it certainly you would going So the I us expect an year, is the X.X through think see progression. anomaly.

the at basis If to we guide to look XXX we're probably up basis XXX to more progress probably year guide, to average. XXX finishing through probably the XXX below you get the obviously, like points that guide above as the and

Operator

Peter of to now next go We Baird. Arment

Peter Arment

the over you -- for just for David, in your projecting, you're maybe -- -- flow snapback. your want pretty Could Thanks outlook bit all just weigh help a the obviously to which With little the retirement. earnings years. given the for about you on year, your just or cash talk the nice a Scott, is

some parts, inputs. moving it Just were the little maybe we a but maybe it lower estimating, we have was of the seems than didn't

Scott Donnelly

it will lot that that's through than a for largely again, year. in QX. Well, in deliver cash The have, didn't obviously Aviation wider inventory and we normally that progress jets of was was the reflective of at QX

course So cash normal, I $XXX pretty we'll in the that $XXX be see our year. in that over range, normal will But will be -- of think but relatively back-end more the light is and as confident loaded. QX, million we're grow we'll

Peter Arment

lines, highlight you're than maybe I you on whether Sheila can broad-based Scott, mean, demand product of obviously new interest. the if you that in just, And appreciate others? talked or in talk I want just I strong what -- refreshed about Okay. bookings just it's markets aviation. environment, maybe just And had lot a Maybe you obviously, are that. general, drawing stronger any about seeing then particular know very to

Scott Donnelly

Look, product the pretty line. across it's much Peter. Thanks, been

demand think announcements. good. Gen been has very in and jet light model demand, feel saw we has the X We strong pretty activity that some with every The across like I we're shape. good in obviously, been order

So very by customers. well that was received very,

the most customers activity product of that very it's level land And times course are all lead of So we'll line. the at we're in again, availabilities probably I I where for most we, Again, given of products. in pretty -- X:X of and a just the the just different book-to-bill continue think level CJX, quarter the portfolio. been things dialogue, in where to strong think are had we we sort looking particular, the again, sustained But strong CJX think of about to that's of through see demand because our given and year. where a

So our baking into X:X what is we're plan. basic

Operator

Robert of now Stallard Vertical We'll go to Research. next

Robert Stallard

of quite luck best Frank, for retirement. been It's right. your

with Let's you be opportunities the and wondering margin? both if within start could revenues guidance, that about Bell. off what could XXXX risks I talk for was and

Scott Donnelly

is think 'XX guidance by don't have lot. business. a I this mostly backlog program and I that we the in the sort receiving customers. of baked Robert, budgets what's Obviously, from ramp into all whole mean, we're FLRAA is there there's the the pending appropriations supported the all the

So business there's I that. don't around booked. think in risk V-XX booked. predictable very around well Certainly, is Most commercial is business largely sustainment of a H-X again, the and

So we're numbers. the way think through there's where on risk to don't Bell -- our I the we course are work the we of year, downside I the lot as in of think of a

Robert Stallard

Okay. any industrial And Aviation demand then seen election? follow-up, I as or wondering if changing at a was since had you've the U.S. sign we've of

Scott Donnelly

normally, we of don't interesting. that It's the that election. a of little the we before didn't, the a mean, think as people well see uncertainty, obviously, see the that in past election I often available bit largely didn't we of the result and just see are size probably quite that presidential stuff around the backlog we in period, drop part out like a of slowdown a No, more that aircraft lot because Robert. kind really I actually of

really I I'm haven't in aware it seen steady, industrial demand any environment in would say the was side. of the and of that So relatively terms we change

Operator

Goldman go now Poponak next at Noah Sachs. We to

Noah Poponak

of the some expected would where income the flow help. talked I And from little and you've cash than time. it I or think would lower Just recovering margin, back a being free be cash to from conversion light I would over that you'd about be have the guidance, net guess, 'XX XXXX inventory

still So a capital else is missing there Or assumption net what that 'XX? in negative all are working we bridge? in

Frank Connor

of with as an ramping some There's headwind we'll year, side, we through the capital about. -- associated be we from the inventory there's talked timing are standpoint. production on -- the a of little bit Obviously, military payments working

than levels going inventory of of at would to for higher So end even have end do we need have 'XX levels inventory the into anticipated, 'XX originally some we anticipated ramp. higher some had though we the

So higher payment and some There said, inventory benefit. see the expecting prep the you activities of as associated of to business we at capital timeframe in 'XX FLRAA is kind expenditures and you military won't particular, the what I growth lot a are Bell. timing, of then just relative in back saw with

Noah Poponak

Okay. That That's the of we the far, dilute was FLRAA as on ramped all margin. resilient anticipated which quite early little would detail hoping that hasn't. a margin. had makes to I And rapidly, you've so it get Bell more sense. been then stages just But

-- down XXXX? Bell margin walk So maybe just that the pieces bring the that would much through in us

Scott Donnelly

XXXX, at a little us more bit But which have of on I think XXXX. maintain a look volume, of you some volume down, H-X for at that that Well, macro aftermarket Nigerian allowed H-X Obviously, will if we by in through do us. side. to down. of have deal with did coming the some Bell strong not We V-XX the level, still H-X better the improvement is to start were you're helped come

it still to was strong but in we'll be flatter aftermarket XXXX, it's XXXX. have in think from I going where

dilutive. obviously in which two long growth on tend margins. So you OEM increased really business. of you so the commercial commercial deliveries and They to the commercial FLRAA dilutive drivers our be a deliveries, are FLRAA as ramp ramp and term, growth the aftermarket, ton from generate a know, of real of that deliveries. And to lot for both are But the very see coming XXXX OEM good

somewhat that based always we've this or not mix, down So margin EPS will having trying level. to that we're that dilution at we've on that but be a said, target come problem the expected as

operating be range going target. It's we that we're margin that think the a on raises of least able on we still sort I we're XXXX or as of lower the at to in not that kind in the dollars. little still bar more profit of revenue grow pressure even hold in think holding of But So I because dollars being business. range outperformed just and XXXX, that less to year-over-year

Noah Poponak

the very Okay. Great. thanks us new Frank retirement and and Frank. for the Dave add my over and I'll working appointments, years, congrats the with to on much

Operator

now Seth at next go JPMorgan. Seifman to We

Seth Seifman

Frank. Congratulations,

come XX%, It Just from performance the maybe the the to end to year Bell Bell guide to and to guide. up I most that slightly shortfall? at went in at QX that high about something think of in came in strong other Was the at But changed side. there XX.X% QX was and through I the relative certainly to think, that initial lower. led

Scott Donnelly

weren't I are had at some as favorable user that adjustments Well, have to fixed we option price price exercise in that did mean, would FLRAA. not fixed was we do the that I great that mean, not exercised we test a Bell options QX around expect, margin. program did limited and largely is the a

So dilution, did accounting create that bit of drag some put do when program for you a a in us. little QX did the which

Seth Seifman

Okay.

the versus net just then Is how jets -- steady steady terms of pretty pretty of itself it's the maybe that trending a it's versus to And year. been and have Okay. we're Aviation, Is that been composition? composition been a we about the how terms level in trending both versus of deliveries seeing? follow retail. it at orders the of in through those quite think When up, orders

Scott Donnelly

as into linear, right? these It's a in guys fairly speaking, generally not holds on not in, flat, based just month. usually know, about orders of general, the it put XX-year always. backlog but every forward, put Well, Because we sort you

how many can they how so exercises some be there from variation versus And put. have happen deliveries make quarter-to-quarter we to based to that new on quarter in many

bit it's But year, of from variability quarter-to-quarter. the generates process. a of pretty a little not linear the stable. But it's it over been So perfectly course

Operator

to Wolfe Walton with now Next Myles Research.

Myles Walton

I'm what a And imagine in looks XXX curious the off number declines I On in XXX. a I don't looking from forward? going years of R&D. came the stable year this the like of would started number R&D, it there. a It of the you R&D I on It underrun few Is with be, for for underrun for at was a to know know, row Bell. front, the to good that And outlook cause much 'XX? 'XX a you're also XXX.

Scott Donnelly

going the number the a that Bell a forward. in R&D drove I FARA on with program basis what think think it's program significant a year-over-year of change was I is dynamic up. end good wrapped certainly the as Look,

R&D I across we'll so basis, spending see more a And the Bell as well normalized at as rest go-forward businesses. think of on the

the R&D the that and part the drove a did in frankly, sure, Bell that program. we to higher we was net associated for at some So funding put the lower FARA of in what of see with the step-down margin, year to drove having were

Noah Poponak

of relative RCV billion. and Okay. top how on the outlook or to goes are of how this of line sort are the and for programs I And TAS year your sensitive goes. 'XX How on kind for maybe systems year then those to systems, outcomes the $X.X know decisions dictate maybe

Scott Donnelly

later RCV we the first have in the more program, a is huge to year. half to of Obviously, programs FTUAS up. the think probably the it. half be course, don't second expect sensitivity I ramp to those And there's XXXX. of of

case growth of standpoint certainly sensitivity FTUAS, because there's from a a it's huge of So more and in important the huge into us in to particularly 'XX what They're the numbers. looks as phases, much the in late we early and beyond. to like year, go not they're not them.

milestones as them but of not the revenue impact for in So course important in XXXX, the on huge I a guess having year. margin of us I think and

Operator

. David now next to go Strauss Barclays. at We'll

David Strauss

of relative get Scott, Was was Or happened I missed that bit on to there? kind in a your in that terms that to in more XX supply what Aviation strike? you're of light, fourth chain? quarter little the in factory deliveries. you own post revenues XX maybe assume the getting restarted it What the came like looks

Scott Donnelly

original the mid-teens didn't year, Well, driven we the -- certainly, really guidance aircraft, fact the that of of was largely didn't versus get more I really the -- for beginning in October. by probably that until our we yes, running was mean factory and it that again

November. sorry, I'm beginning the -- of So

So we of X/X really lost out. with the quarter the workforce having

pleased So -- have as think with I the we the in a folks is said good outcome. We're are Everybody lose I up. I But -- years. workforce It's fine with with for news place. contract to not earlier, place sure, is And X think did, the back. of the good in ramping quarter production outcome. for a the agreement X/X the we're having really operation is

David Strauss

was following the you're of a deliveries at I -- you up how were terms do I in little forecast terms looking of the in and took revenue looking that. the short you XXXX? down for Yes. Yes. ramp feel of Aviation there, you at X.X%, just chain guess supply of just about

Scott Donnelly

supply it. that's the Look, I the about David, XXXX. much I I that say position pieces than are. we certainly think we're coming feel they parts course were guiding better in third-party would we where are mean, into factory of the throughout chain a good where

So that feels very good.

have and we're signed. with put the been hung short very are the certainly in the again, has in people was back for obviously period seeing the of agreement the where through part contract a before place. XXXX. there once time critical us had the other came stability very And been from improved happy workforce attrition number course they been of numbers of with of is and strike folks the rest of were And that since The that our back, came We even retention.

momentum think the in I is the direction. right So

operating we've ramp would out here up. Now aircraft get done year us deliveries over the lines, in supposed I'd in say expect. front of 'XX of the that production have of to the we in But lot it be to as got clearly of work which and were a to are look early the the terms of times tack coming course improve to

good $X.X this point, to that I the billion. so deliver And and we're, able at the on think make to going be pretty ramp at that feeling guide we're

David Strauss

And certification, that sensitive timing guide the for SCEM to timing? Okay. all looking And at at? are aviation what is you

Scott Donnelly

expecting mean, year. it or be But certification Well, through the If is an the going action. we're well. I problem. work obviously, actual issue We've clearly, an It's got to the a the FAA. there's of in to the this FAA course not

I think testing. is feel well. very we have great The in flight do about We aircraft the few going year. a the program

So our aircraft first expect to material. guide, certainly certainly we But not would of late yes, it's the part but X get year. delivered this

Operator

We go next now America. of to Ron Epstein of Bank

Ronald Epstein

be there seen with change in aviation. Scott, could maybe added Is anything, tailwind private little the you've administration for that an

for private example, depreciation that you a some catalyst any an aviation? as So have heard historically has around been that, discussion form like nice something of accelerated coming or back

Scott Donnelly

think I specifically new impact, general, most high be to head customers, and have I to Ron, midsized But businesses. policy, certainly of successful think I they the they to broad their about growing. get entrepreneurial, therefore, policy like mean, depreciation are I but terms general, as of businesses, our in is their nothing say, accelerated aircraft. range and of customers to likely obviously. are encouraging good know, them feel businesses know that around a tax in small is don't it's but wealth, I expenditures And would how that that CapEx you helpful regulatory in Their net

that's obviously, out how we early business nature quite it's our private in for tax just point item. -- they prospects of think and And particular general, wouldn't I of all its way is think here say, the the would I one don't outlook customers of the kinds stuff for know But out. to good it's I So work is the good, aviation. that going and

Ronald Epstein

have maybe change sense. time contracting, contracting? And direction And opportunities environment I was big or a of does change in seem, more you with -- but at see risk. you is in cool. for while always guys bit. with to thought A just seem follow-up ton however, commercial-type terms more push that the a can, Scorpion that commercial there of does if and like That Yes. Do DoD didn't you potentially kind makes more like It right, little the a towards for be a to that. potentially a the did a taking more seem appetite I ago, maybe maybe something parenthetically, contractors maybe X.X changing Scorpion any a guys

Scott Donnelly

in X know about I I have ago X certainly a years that -- that think a don't was Scorpion, find ways acquisition will this right? accelerate mindset years we're Army's the around there to to on I go to and say ago, lot this want And MTAs specific we however a you Well, would administration OTAs it, of Ron. years ago, frankly, about working was that the like things Command, the things to and the that drive of system, Futures to today. so and faster, helped X our

early, programs. or real but for So talks the out I the huge obviously. to expectations acquisition good again, what's policy, good in Everybody about that I terms things very figure for and war of is expect accelerate how to to it's fighter reform, change wouldn't say taxpayer

out would I'm things have And a think that. quicker. data I certainly figuring and frankly, building you within be do again, of get is it's the process run accelerate Commerciality faster clearly better part just administration is or how any but that. we a of the out that beneficiary incoming And the so We to make in and early. But yet, interested certainly don't hopeful how things.

we'll some the programs them the great of commands. And I we'd actual of hands to see bunch the the love get hopefully, combating a war that side fighter military, have think that happen. see out in We of to

Operator

We of Parsons go to now UBS. Gavin next .

Gavin Parsons

margin. questions two on the maybe Aviation Just

the disrupted mentioned the of having 'XX some You still impact deliveries, so 'XX.

Just much us XX% absorbing excess guide? you was sense that how you're could hoping some of margin give cost of that XX% in to

Scott Donnelly

go-forward overhead, deliveries. been Well, the we we of normal big delivery. expense. period cost as QX otherwise and period a number, of aircraft rates a a base take have we're we spread was that pretty about margin of expense, an Gavin, we did not. given take have which around number light, expect across into aircraft were our volumes we And built plan hit It because of the lot did and significant a driver, sort would But on think

see to in expensing significant the volumes expect back period wouldn't I associated So XXXX. any lower with

Gavin Parsons

you that on on for price what 'XX? us can expecting anything performance then And you're and give net

Scott Donnelly

expect think mean, Look, No. driver we certainly that's the margin a as up XXXX. where I we that And significantly up said, have with to we'll lot of end we efficiencies I guided. of versus factory performance a and be

there's but still terms price out look, of also still industry, the price, in In inflation is there. is good

we've of I as a net about that. on So before, expect spread huge don't talked the

I of XXXX think most to much factory of in a back of margin getting most as should result our here be our performance where we performance. improvement, improvement better

Operator

this Skibitski take from question we'll Pete of our final morning Alembic And Global.

Peter Skibitski

longer this fiscal military Guys, Frank. Congrats, at is 'XX that your resolution, impacting continuing all? programs

Scott Donnelly

the sitting appears they But think hates sort our certainly, -- finalize it have -- be to on Pete, look, trying budget customer not And a expectations, allowed our the mean, been they're they're XXXX do I executing of and because I shelf it customer think the the XXXX expect they action. be in appropriated big seen to impact. XXXX. to the I have now I what of when to budgets mean, it. has for waiting final constantly to the uncertainty hate we I and haven't

disruptive. it's So very

some the is horrible of But I good from customer funded news think are be focused and it it's process, energy the most and the become of year, have CR takes will the a already a an budget new lot be programs. actual things, new problem. starts, that our on that certainly things. away into starts. you are will but becomes before already not a that further get programs obviously, can time other resolved we as There expect They're

Peter Skibitski

Got it.

Okay.

Does that's in at positive one all? your regulations terms one terms radar? on if can company, commercial the business on with share whole issue either towards that that on is your you maybe Just we impact tariff anything me. I your Bell radar in us? policies new the for get think of of one tariffs there Just terms radar thing Canada. new or negative be administration, Across anything last or for the the that in or could of

Scott Donnelly

Peter. Look, Sure. Yes.

a our are otherwise the and think positive expectations overall tax we of talked could regulation, sort probably resolution have again, business for maybe on I just better what about side, the happened. less climate,

that's tax pro, regulatory in think been coming on overall we has Mexico. -- much from the have we as the is go front, standpoint, the on net we So in operations Clearly, don't we know for I those us. accelerate, the that an tariff out front, I past how to which an be, the do military environment business very Look, positive how front, in faster, wildcard. a I on again, I administration we figure said, think specifics. do good have would very the how mean,

rotor you pretty as into big a sell on assume we significant We of important side, suppliers value to the But of particularly like are us do operation Mirabel in then the side Canada Bell lot Bell over that Bell. our commercial and noted, the wing, things get Canada, back of operations that commercial both the have and go U.S. do in have, a hit. from dollars some have the and of Pratt those on a we fixed don't engines Canada lot

an it's unknown. So -- look,

with how free to around way so how deal really out. lot is And go-forward the thing. one see got negotiations basis. not this And working agreements and we're on think this the a I positioned plays Again, on do you a other on trade We've of

see going how and just hang to So plays kind it out. of we're there in

Operator

much Call. QX And gentlemen, all ladies us great today all so today's that of to remainder XXXX wish conclusion a and thank to like We'd Textron you us you of day. Earnings for Release will and your the bring joining

call later (XXX) available XXX) a Just joining We X a by reminder, Goodbye. today's replay calling be for you today XXX-XXX-XXXX. day. great wish for beginning will thanks Again, all us, everyone. or XXXX

Textron (TXT) 22 Jan 252024 Q4 Earnings call transcript