Textron Inc. announced financial results for the fourth quarter and full year of 2017, and provided guidance for its 2018 financial outlook.
Net earnings for the quarter were reduced by a provisional tax charge of $1.00 per share resulting from the enactment of the Tax Cuts and Jobs Act (“the Tax Act”), and $0.14 per share of restructuring charges. With these items that were disclosed in an 8-K filing earlier this month, the company reported a loss from continuing operations of $0.40 per share in the quarter, compared to income from continuing operations of $0.78 per share in the fourth quarter of 2016. Adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $0.74 per share for the fourth quarter of 2017 compared to $0.80 per share in the fourth quarter of 2016.
Revenues in the quarter were $4.0 billion, up 5.0 percent from the fourth quarter of 2016. Textron segment profit in the quarter was $360 million, down $31 million from the fourth quarter of 2016.
For the full year, net earnings were reduced by a provisional tax charge of $0.99 per share resulting from the Tax Act, and $0.32 per share of restructuring charges. Including these items, full-year income from continuing operations was $1.14 per share compared to $3.09 per share last year. Full-year adjusted income from continuing operations, the non-GAAP measure, was $2.45 per share, compared to $2.62 in 2016.
Net cash provided by operating activities of continuing operations of the manufacturing group for the full year was $947 million, compared to $988 million last year. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $889 million compared to $573 million last year.
“We delivered strong cash performance throughout the year and returned $603 million to shareholders through share repurchases and dividends,” said Textron chairman and CEO Scott C. Donnelly.
Textron is forecasting 2018 revenues of approximately $14.6 billion, up 3.0 percent from the prior year. Textron expects full-year 2018 earnings per share from continuing operations will be in the range of $2.95 to $3.15. The company will benefit from the Tax Act and expects an effective tax rate of 22.5% for 2018.
The company is estimating net cash provided by operating activities of continuing operations of the manufacturing group will be between $1,170 million and $1,270 million and manufacturing cash flow before pension contributions (the non-GAAP measure) will be between $700 and $800 million, with planned pension contributions of about $55 million.
Donnelly continued, “Our outlook reflects the continuation of our strategy around growth through new product investments and acquisitions to drive increases in long-term shareholder value. In 2018, we expect these investments to drive increasing organic sales along with margin expansion and strong cash generation.”
Q4 results by segment — Industrial
Industrial revenues were $1.1 billion, up 20 percent largely related to Arctic Cat.
Segment profit was up $10 million from the fourth quarter of 2016 due to favorable performance.