Textron narrows 4Q loss but shares fall on weak profit outlook for 2010

Textron shares fall after weak 2010 outlook

PROVIDENCE, R.I. — Textron Inc., which makes Bell helicopters and Cessna aircraft, on Thursday reported a narrower fourth-quarter loss on fewer charges but predicted 2010 profit below Wall Street expectations due to continued weakness in demand for business jets.

Textron has been hurt by a downturn in sales of business jets as company spending and credit dried up in the recession and as lawmakers frowned on executives’ private jets. Cessna revenue fell $642 million due to fewer sales, and Bell Helicopter sales also slipped $51 million, as higher prices partly offset weaker sales. The company has countered the revenue declines by aggressive cost-cutting moves, trimming its work force by a quarter, or more than 10,000 employees, over the past year.

But weakness in the business jet market isn’t expected to lift soon. The company said Thursday it expects to earn adjusted income of 30 cents to 50 cents per share this year, well below the 82 cents per share that analysts have predicted.

Textron shares fell $1.42, or 6.8 percent, to close at $19.58 on more than four times average trading volume.

Textron said it lost $63 million, or 23 cents per share, in the fourth quarter, compared with a loss of $209 million, or 86 cents per share, a year earlier. Excluding hefty charges to write down the value of its golf and turf business, and for restructuring measures, the Providence-based company said it would have earned 15 cents per share.

Revenue fell to $2.81 billion from $3.55 billion a year ago. On a conference call with analysts, CEO Scott Donnelly said the company delivered 289 jets Cessnas versus 467 in 2008.

Analysts, who usually exclude items from their forecasts, had expected adjusted earnings of 8 cents per share on revenue of $2.80 billion, according to a Thomson Reuters survey.

For all of 2009, the company lost $31 million, or 12 cents per share, compared with profit of $486 million, or $1.94 per share, in 2008. Revenue fell to $10.50 billion from $14.01 billion.

Textron estimates 2010 revenue will come in at about $10.8 billion, reflecting growth in its Bell, Textron Systems and Industrial segments, partially offset by less revenue at Cessna and its finance division. That’s better than the $10.52 billion that analysts have predicted.

Donnelly said the business jet market environment remains difficult but stable, and expects Textron will begin to see improvement in order flow through the second half of the year.