Textron Inc. [TXT] on Friday posted solid net income in the second quarter on higher sales as the company benefited from strong results in its businesses that sell weapons, sensors and industrial systems.
Net income increased 6 percent to $177 million, 65 cents earnings per share (EPS), from $167 million (60 cents EPS) a year ago. Excluding discontinued operations, per share earnings in the quarter were 66 cents EPS, beating consensus estimates by two pennies.
Profit in the Textron Systems segment increased nearly three-fold to $60 million, driven by higher sales of weapon systems internationally, more volume on unmanned aircraft systems, and a sales mix that favored higher margin products.
Sales in the quarter were up 8 percent to $3.5 billion from $3.2 billion a year ago due to increases at the Textron Systems, Industrial and Textron Aviation segments.
Revenue in the Textron Systems segment increased 51 percent to $487 million on the weapons and UAS sales and recent acquisitions. Sales in the Aviation segment were up on increased deliveries of Citation business jets while the Industrial segment benefited from higher volumes and acquisitions.
Scott Donnelly, Textron’s chairman, president and CEO, said on the earnings call that a potential sale of the Sensor Fuzed Weapon to Saudi Arabia is hung up at the moment in getting approvals through the State Department.
At Textron’s Bell segment, sales were down on a decline in commercial helicopter deliveries while operating profit slipped on the lower sales and an unfavorable product mix toward lower margin items.
Textron reaffirmed its guidance for 2016 but said it excludes a favorable tax settlement that will be recorded in the third quarter and will add $200 million (74 cents EPS) to earnings.
Total backlog at the end of the quarter stood at $8.3 billion, up $300 million from the end of the first quarter.