Textron reports 40%YoY profit growth in aviation segment
Textron reported a stellar 39.8% year-over-year growth in profit from the executive aviation segment as company reported a outsized growth of deliveries in the commercial turboprops.
“In the quarter, we saw revenue growth in both our commercial aircraft and helicopter businesses, as well as in Bell’s FLRAA program, now known as the MV-75,” said the Textron Chairman and CEO Scott C. Donnelly. “At Textron Aviation, operations continued to improve as production ramped.”
In absolute terms, total revenue grew by $138m to $1.4bn while profits saw an expansion of $51m to $179m during the quarter under review. The $138m growth in revenue came as a result of $116m uptick in aircraft revenue and $22m hike in aftermarket.
Against the $138m growth in revenue, segment profit was up $51m in absolute terms – an increase of 37% in incremental margin. The sharp growth in profitability can be pinned to the product mix shift to turboprops and operational efficiency as company returns to normal operations strike that affected last year’s metrics.
The company made 15 more deliveries in the third quarter at 81 units compared to 66 in the last year. The biggest callout, however, was the 56%YoY jump in commercial turboprops which grew to 39 units delivered compared to 25 last year. This can be attributed to post strike recovery as company’s last year numbers were severely affected by strikes.
On the flip side, total citation jet deliveries stayed flat at 42 units in Q3 compared 41 units in the same quarter of last year. This shows minimal growth trajectory of the company’s aviation segment especially since other manufacturers are posting strong growth numbers amidst a strong business aviation market.
“Textron delivered 42 biz jets (vs our estimate of 46), including 5 Longitudes vs our estimate of 8. There were 11 Latitudes vs 11 a year ago and our estimate of 10. King Airs were at 15 vs 12 last year. TXT delivered 4 SkyCourier. YTD:25 jet deliveries ended at 122 (vs our 126), requiring another 68 deliveries in Q4 (estimate 64) to hit our estimate of 190 (not guided),” said Jefferies in its earnings review.
Despite easing woes, backlog grew from $7.6bn from end of Q3 last year to $7.7bn. With the existing trend in quarterly deliveries, this translates into a book-to-bill ratio of nearly 1.0.
Commenting on the backlog, Jefferies noted that the “Q3 w/ orders of $1.3BB implied, down 11% y-o-y. T12M orders are flattish and some investors may have been of the view bonus tax depreciation actually accelerates spend but we’re not sure that is the case, and it does not drive new buyers of $20MM pieces of equipment, in our view.”
Overall, nine month figures showed a modest increase of 5% in Textron aviation revenues clocking in at $4.2 at the end of third quarter. Segment profit also saw a similar 4% uptick at $486m from $466m.
This translated to profit margin of 11.6% during the nine months – lower than the third quarter’s exceptional margin of 12.1%.
In a separate announcement yesterday, the company also named Bell segment CEO Lisa Atherton as the company’s president and CEO effective from January 4, 2026.
