Textron Inc reported second-quarter 2020 net loss of $0.40 per share, compared to income of $0.93 per share in the second quarter of 2019. Adjusted net income, a non-GAAP measure, was $0.13 per share for the second quarter of 2020. Adjusted net income excludes $78 million of pre-tax special charges ($0.29 per share, after-tax) related to the restructuring plan announced in June and a non-cash inventory valuation charge of $55 million ($0.24 per share, after-tax) as we ceased manufacturing at our TRU Simulation + Training Montreal facility.
“Our defense businesses performed extremely well with both revenue growth and strong operating performance in the quarter, while our commercial businesses worked diligently to reduce costs and mitigate the impacts of temporary plant closures,” said Textron Chairman and CEO Scott C. Donnelly. “The outstanding efforts of our teams in response to the challenging conditions arising from the pandemic drove strong cash performance and positive adjusted earnings in the quarter.”
Cash Flow
Net cash provided by operating activities of the manufacturing group for the second quarter totaled $245 million, compared to $163 million in last year’s second quarter. Manufacturing cash flow before pension contributions, a non-GAAP measure, totaled $215 million, compared to $102 million last year.
Second Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation of $747 million were down $376 million from the second quarter of 2019, primarily due to lower Citation jet volume of $178 million, reflecting a decline in demand related to the pandemic and to a lesser extent, delays in the acceptance of aircraft related to COVID-19 travel restrictions, and lower aftermarket volume of $120 million, reflecting lower aircraft utilization.
Textron Aviation delivered 23 jets, down from 46 last year, and 15 commercial turboprops, down from 34 last year.
Segment loss was $66 million in the second quarter, down from $105 million of profit last year, primarily due to the lower volume and mix and an unfavorable impact of $27 million from performance. Performance includes $53 million of idle facility costs recognized in the second quarter of 2020.
Textron Aviation backlog at the end of the second quarter was $1.4 billion.
Bell
Bell revenues were $822 million, up $51 million or 7% from last year, primarily on higher military volume, partially offset by lower commercial volume.
Bell delivered 27 commercial helicopters in the quarter, down from 53 last year.
Segment profit of $118 million was up $15 million, largely on higher military volume, partially offset by an unfavorable impact from performance.
Bell backlog at the end of the second quarter was $5.8 billion.
Textron Systems
Revenues at Textron Systems were $326 million, up $18 million or 6% from last year, primarily due to higher volume in our Unmanned Systems product line, partially offset by lower volume in the Marine and Land Systems product line.
Segment profit of $37 million was down $12 million from last year, primarily due to an unfavorable impact from performance, which included an $18 million gain related to our contribution of assets to a training business formed with FlightSafety International during last year’s second quarter.
Textron Systems’ backlog at the end of the second quarter was $1.9 billion.
Industrial
Industrial revenues of $562 million were down $447 million from last year, $321 million at Fuel Systems and Functional Components and $126 million at Textron Specialized Vehicles, primarily due to temporary manufacturing facility closures.
Segment loss was $11 million, down from $76 million of profit in the second quarter of 2019, primarily related to lower volume and mix, partially offset by favorable performance which included the impact of cost reduction activities. Industrial also recognized approximately $8 million of idle facility costs in the second quarter of 2020.
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