Textron’s (TXT) shares experienced a decline of 7.1% on Thursday, despite surpassing analyst predictions earlier in the day.
As we approached the quarter’s end, Wall Street anticipated that Textron would report a net income of $1.45 per share with quarterly revenue of $3.65 billion. However, the actual results showed a higher net income of $1.55 per share and revenues of $3.7 billion.
Textron Q2 earnings
From my perspective, it appears there are a few points worth noting. Initially, the earnings figure, as per generally accepted accounting principles (GAAP), stood at $1.35 per share. However, the reported $1.55 isn’t a GAAP result but rather a non-GAAP one.
Secondly, even the non-GAAP number showed only a marginal increase of $0.01 compared to what Textron reported last year. This is surprising given that Textron managed to grow its sales by 5.4% year over year.
Essentially, the sales increased slightly due to an uptick in commercial aircraft and helicopter purchases, plus income from the MV-75 tiltrotor aircraft. However, the profits derived from these sales declined.
Free cash flow for the quarter was $317 million, up from $309 million earned one year ago.
Is Textron stock a sell?
Textron’s stock is priced at approximately 18 times its trailing-12-month net income, which totals $816 million, and it has a market capitalization of $14.6 billion. This isn’t too expensive considering the company’s double-digit earnings growth potential and attractive dividend payout. However, disappointingly, Textron’s earnings are barely growing in the single digits, and its current dividend yield is only 0.1%.
In simpler terms, according to recent figures, Textron is only producing approximately $0.69 in actual cash that can be freely used for every dollar of profit it declares. This implies a price-to-free cash flow ratio that’s roughly 26, which seems quite high given its relatively slow growth rate.
I fear that makes Textron stock a sell.
Read More
- Gold Rate Forecast
- Big Sell on Big Data: When Even the Suits Say ‘Enough’s Enough’
- Brent Oil Forecast
- Elden Ring Nightreign Minor Update 1.002.004 Brings Short List of Fixes
- Elden Ring’s Switch 2 port delayed into 2026 by FromSoftware for “performance adjustments,” and people are surprisingly OK about it: “I’d rather it releases in a better state”
- ETF Exit: A Tale of Diversification and Dwindling Dreams
- Wuthering Waves 2.5 banners: Phrolova debuts
- Bitcoin’s Paradox: Billionaire Buys, Price Stagnates
- How Leaderboards and Tournaments Keep Players Coming Back for More
- Superman Tops Black Adam After Full Week On Nielsen, Outperforms Marvel
2025-07-24 23:31