Textron Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported revenue of $3.8 billion for the third quarter of 2026, an increase of 4% ($149 million) compared to the prior year.
• GAAP income from continuing operations was $1.56 per diluted share, up from $1.31 per share in the third quarter of 2025.
• Adjusted income from continuing operations (non-GAAP) was $1.76 per diluted share, up from $1.55 per share in the prior year quarter.
• Net cash provided by operating activities for the manufacturing group was $512 million, compared to $348 million in the prior year quarter.
• Manufacturing cash flow before pension contributions (non-GAAP) totaled $418 million for the quarter, compared to $281 million in the prior year quarter.
• Net income for the quarter was $270 million.
• Diluted average shares outstanding were 172,532,000.

Guidance and Future Outlook:

• Raised full-year 2026 GAAP earnings per share outlook to a range of $5.64 to $5.74, up from the previous range of $5.39 to $5.59.
• Raised full-year 2026 adjusted earnings per share outlook to a range of $6.55 to $6.65, up from the previous range of $6.40 to $6.60.
• Raised full-year 2026 manufacturing cash flow before pension contributions outlook to a range of $800 million to $900 million, up from the previous range of $700 million to $800 million.
• The updated outlook reflects U.S. Army Congressional approval for the Above Threshold Reprogramming (ATR) request related to the MV-75 Cheyenne program and associated contract modifications obligating funding.

Business Segments and Product Lines:

• Textron Aviation: Revenue increased 14% to $1.7 billion, driven by higher aircraft revenues ($152 million increase) and aftermarket parts and services revenues ($49 million increase). Delivered 51 jets (up from 42) and 32 commercial turboprops (down from 39). Segment profit was $179 million, up 4%. Backlog stood at $8.0 billion.
• Bell: Revenue decreased 9% to $933 million, primarily due to lower military revenues ($59 million decrease) on the MV-75 program and lower commercial helicopter volume. Delivered 29 commercial helicopters (down from 30). Segment profit was $76 million, down 17%. Backlog stood at $7.6 billion.
• Textron Systems: Revenue increased 16% to $360 million, driven by higher volume on armored land vehicles and military training services provided by Airborne Tactical Advantage Company (ATAC). Segment profit was $57 million, up 21%. Backlog stood at $3.5 billion.
• Industrial: Revenue increased 1% to $765 million. Textron Specialized Vehicles revenue rose 9% to reflect higher volume, mix, and pricing. Kautex revenue decreased 5% due to lower volume and mix. Segment profit was $38 million, up 23%.
• Finance: Revenue was $13 million and segment profit was $5 million, down from $26 million revenue and $18 million profit in the prior year, primarily due to $11 million in gains recognized in the prior year from the disposition of non-captive assets.

Market and Competitive Landscape:

• The U.S. Army received Congressional approval for the ATR request related to the MV-75 Cheyenne program, facilitating contract modifications and funding obligations.
• Textron Aviation benefited from higher volume and mix, particularly in Citation jets, partially offset by lower commercial turboprop volume.
• Bell faced volume and mix headwinds in both military and commercial sectors.
• Textron Systems saw growth driven by armored land vehicles and ATAC services.

Risks and Challenges:

• Potential interruptions in U.S. Government funding, budget reductions, or changes in defense priorities.
• Risks associated with U.S. Government contract modifications, terminations, or payment withholdings.
• Volatility in the global economy, foreign exchange rates, interest rates, and inflationary pressures.
• Risks related to international business operations, including reliance on joint venture partners and suppliers.
• Risks regarding the separation of the Industrial segment and the ability to realize anticipated benefits.
• Cybersecurity threats, supply chain disruptions, and potential impacts from pandemics, natural disasters, or geopolitical events.

Management Commentary and Tone:

• CEO Lisa M. Atherton stated the company "delivered a strong quarter" with $3.8 billion in revenue and $1.76 in adjusted EPS.
• Management highlighted that higher jet deliveries at Textron Aviation and program execution at Textron Systems drove double-digit revenue growth in those segments.
• Management noted that Bell continued to make significant operational progress on the MV-75 Cheyenne program.

Other Key Points:

• Textron returned $239 million to shareholders through share repurchases during the quarter.
• Effective January 4, 2026, the Textron eAviation segment was realigned, with Pipistrel moving to Textron Aviation and military unmanned products moving to Textron Systems.
• Total assets were $18.346 billion as of October 3, 2026, compared to $18.129 billion as of January 3, 2026.
• Long-term debt decreased to $3.110 billion from $3.534 billion at the start of the fiscal year.
• Inventories increased to $4.861 billion from $4.278 billion at the start of the fiscal year.
• Conference call scheduled for October 29, 2026, at 8:00 a.m. Eastern time.