Textron Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Textron (NYSE:TXT) will unveil its latest earnings on Thursday, July 19, 2012. Textron is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services.

Textron Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 44 cents per share, a rise of 51.7% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 43 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 44 cents during the last month. Analysts are projecting profit to rise by 48.1% versus last year to $1.94.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 5 cents, reporting profit of 41 cents per share against a mean estimate of net income of 36 cents per share.

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A Look Back: In the first quarter, profit rose more than fourfold to $118 million (40 cents a share) from $29 million (9 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 15.2% to $2.86 billion from $2.48 billion.

Stock Price Performance: Between April 18, 2012 and July 13, 2012, the stock price fell $3.50 (-13.1%), from $26.65 to $23.15. The stock price saw one of its best stretches over the last year between December 28, 2011 and January 6, 2012, when shares rose for seven straight days, increasing 5.3% (+96 cents) over that span. It saw one of its worst periods between July 29, 2011 and August 8, 2011 when shares fell for seven straight days, dropping 29.2% (-$6.75) over that span.

Wall St. Revenue Expectations: Analysts are projecting a rise of 9.5% in revenue from the year-earlier quarter to $2.99 billion.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 0.7% in the second quarter of the last fiscal year, 13.5% in the third quarter of the last fiscal year and 4.1% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.43 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 2.89 in the fourth quarter of the last fiscal year to the last quarter driven in part by a decrease in current assets. Current assets decreased 9.2% to $7.7 billion while liabilities rose by 8.2% to $3.17 billion.

Analyst Ratings: There are seven out of 10 analysts surveyed (70%) rating Textron a buy.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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