Textron Reports Q4 Earnings Beat but Stock Drops on Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy TXT?
Source: Fool
- Earnings Beat: Textron reported an adjusted earnings per share of $1.73 for Q4, surpassing Wall Street's expectation of $1.70, with sales reaching $4.2 billion, exceeding analyst forecasts of $4.1 billion; however, the stock dropped nearly 8% on earnings day.
- Strong Sales Growth: The company experienced a 16% year-over-year sales increase in Q4, with adjusted earnings climbing 29%, while GAAP earnings of $1.33 represented a 75% improvement from last year's Q4, highlighting robust performance in its aviation and helicopter divisions.
- Significant Cash Flow Increase: Textron's free cash flow soared by 46.6% to $944 million for the year, indicating substantial progress in cash management and operational efficiency, which enhances its capacity for future investments.
- Disappointing Guidance: Despite analysts forecasting earnings of $6.84 per share for 2026, Textron cautioned that adjusted earnings may only reach $6.60 per share, with GAAP profit around $5.49, suggesting a slowdown in growth that could undermine investor confidence.
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Analyst Views on TXT
Wall Street analysts forecast TXT stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for TXT is 89.71 USD with a low forecast of 86.00 USD and a high forecast of 94.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
7 Analyst Rating
0 Buy
7 Hold
0 Sell
Hold
Current: 90.730
Low
86.00
Averages
89.71
High
94.00
Current: 90.730
Low
86.00
Averages
89.71
High
94.00
About TXT
Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with various solutions and services. The Company's segments include Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation, and Finance. Textron Aviation segment manufactures, sells and services Cessna and Beechcraft aircraft, and services the Hawker brand of business jets. Bell segment supplies military and commercial helicopters, tiltrotor aircraft, and related spare parts and services in the world. Textron Systems segment offers electronic systems and solutions, advanced marine craft, piston aircraft engines, and others. Industrial segment designs and manufactures a variety of products within the Kautex and Specialized Vehicles product lines. Textron eAviation segment includes Pipistrel, a manufacturer of light aircraft, along with other research and development initiatives related to sustainable aviation solutions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Textron Reports Q4 Earnings Beat but Stock Drops on Guidance
- Earnings Beat: Textron reported an adjusted earnings per share of $1.73 for Q4, surpassing Wall Street's expectation of $1.70, with sales reaching $4.2 billion, exceeding analyst forecasts of $4.1 billion; however, the stock dropped nearly 8% on earnings day.
- Strong Sales Growth: The company experienced a 16% year-over-year sales increase in Q4, with adjusted earnings climbing 29%, while GAAP earnings of $1.33 represented a 75% improvement from last year's Q4, highlighting robust performance in its aviation and helicopter divisions.
- Significant Cash Flow Increase: Textron's free cash flow soared by 46.6% to $944 million for the year, indicating substantial progress in cash management and operational efficiency, which enhances its capacity for future investments.
- Disappointing Guidance: Despite analysts forecasting earnings of $6.84 per share for 2026, Textron cautioned that adjusted earnings may only reach $6.60 per share, with GAAP profit around $5.49, suggesting a slowdown in growth that could undermine investor confidence.
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- New Board Member: Textron announced the election of Cristina Méndez to its Board of Directors, effective February 15, 2026, aiming to enhance corporate governance and strategic decision-making through her financial expertise.
- Rich Financial Background: Currently serving as CFO of Otis Worldwide, overseeing $14 billion in net sales with customers in over 200 countries, Méndez's international experience is expected to bring a global perspective to Textron.
- Leadership Experience: Prior to joining Otis, Méndez held over 15 years of senior financial management roles in the global telecommunications industry, most recently as Senior Vice President at Telefónica Deutschland, where she managed financial operations and strategic initiatives, showcasing her leadership in complex environments.
- Educational Background: Méndez holds a degree in Telecommunications Engineering from the Bilbao School of Engineering in Spain, and her technical background combined with financial management experience will support Textron's innovation and growth.
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Textron's 2025 Financials Release Triggers Stock Plunge
- Financial Performance: Textron's Q4 2025 revenue rose 16% to nearly $4.18 billion, although the growth appears limited due to last year's strike impact, indicating potential recovery.
- Profitability Improvement: The company's net income increased by 24% to $307 million ($1.73 per share), aligning with analyst expectations and reflecting strong performance in its military helicopter segment.
- Guidance Below Expectations: Textron forecasts 2026 revenue of $15.5 billion, nearly 5% higher than 2025, but the adjusted EPS guidance falls short of the average analyst projection, dampening investor sentiment.
- Market Reaction: Following the earnings release, Textron's stock plummeted nearly 8%, highlighting investor concerns over future profitability despite the company's ongoing growth in the military sector.
See More
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- Chipmaker Strength: ASML reported record Q4 bookings of €13.2 billion, significantly exceeding the consensus of €6.85 billion, which boosted chipmakers and AI infrastructure stocks, enhancing market confidence in AI spending sustainability.
- Fed Policy Unchanged: The FOMC maintained the interest rate at 3.50%-3.75% as expected, with Chair Powell indicating strong economic performance without signaling imminent rate cuts, keeping market focus on future policy directions.
- Dollar and Gold Fluctuations: The dollar index rebounded after hitting a nearly four-year low, while President Trump's comments on dollar weakness pushed gold prices up over 3% to a new all-time high, reflecting increased demand for safe-haven assets.
- Economic Data Expectations: Initial jobless claims are expected to rise by 5,000 to 205,000 this week, and Q3 nonfarm productivity is anticipated to remain at 4.9%, indicating ongoing economic growth and potential market volatility.
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- Mixed Stock Performance: While the S&P 500 index reached a new all-time high and the Nasdaq 100 hit a three-month peak, market sentiment was tempered by the Federal Reserve's decision to keep interest rates steady, reflecting investor uncertainty regarding future economic policies.
- Interest Rate Policy Impact: The Fed's choice to maintain the benchmark rate between 3.5% and 3.75% ends a series of three consecutive rate cuts aimed at protecting the labor market, which may exert short-term negative pressure on the stock market.
- Market Focus: This week, the market will closely monitor new tariff news and the prospects for a continued resolution to fund the government, with initial jobless claims expected to rise by 5,000 to 205,000, highlighting the fragility of economic recovery.
See More
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- Market Performance: The S&P 500 index rose by 0.03%, reaching a new all-time high, while the Nasdaq 100 increased by 0.43%, reflecting strong investor confidence in tech stocks, particularly chipmakers and AI infrastructure.
- ASML Order Surge: ASML Holding NV reported record Q4 bookings of €13.2 billion, significantly exceeding the consensus of €6.85 billion, which not only solidifies the company's leadership in the semiconductor industry but also boosts market optimism regarding sustainable AI spending.
- Economic Data Impact: US MBA mortgage applications fell by 8.5% in the week ending January 23, with the purchase mortgage sub-index down 0.4% and refinancing down 15.7%, indicating pressure from high interest rates on the housing market that could affect future consumer spending.
- Political Risk Escalation: President Trump threatened new 100% tariffs on US imports from Canada and mentioned the possibility of a partial government shutdown, creating uncertainty that could negatively impact the stock market, prompting investors to closely monitor the upcoming FOMC meeting results.
See More
Textron Reports Q4 Earnings Beat but Stock Drops on Guidance
- Earnings Beat: Textron reported an adjusted earnings per share of $1.73 for Q4, surpassing Wall Street's expectation of $1.70, with sales reaching $4.2 billion, exceeding analyst forecasts of $4.1 billion; however, the stock dropped nearly 8% on earnings day.
- Strong Sales Growth: The company experienced a 16% year-over-year sales increase in Q4, with adjusted earnings climbing 29%, while GAAP earnings of $1.33 represented a 75% improvement from last year's Q4, highlighting robust performance in its aviation and helicopter divisions.
- Significant Cash Flow Increase: Textron's free cash flow soared by 46.6% to $944 million for the year, indicating substantial progress in cash management and operational efficiency, which enhances its capacity for future investments.
- Disappointing Guidance: Despite analysts forecasting earnings of $6.84 per share for 2026, Textron cautioned that adjusted earnings may only reach $6.60 per share, with GAAP profit around $5.49, suggesting a slowdown in growth that could undermine investor confidence.
See More
Textron Elects Cristina Méndez to Board of Directors
- New Board Member: Textron announced the election of Cristina Méndez to its Board of Directors, effective February 15, 2026, aiming to enhance corporate governance and strategic decision-making through her financial expertise.
- Rich Financial Background: Currently serving as CFO of Otis Worldwide, overseeing $14 billion in net sales with customers in over 200 countries, Méndez's international experience is expected to bring a global perspective to Textron.
- Leadership Experience: Prior to joining Otis, Méndez held over 15 years of senior financial management roles in the global telecommunications industry, most recently as Senior Vice President at Telefónica Deutschland, where she managed financial operations and strategic initiatives, showcasing her leadership in complex environments.
- Educational Background: Méndez holds a degree in Telecommunications Engineering from the Bilbao School of Engineering in Spain, and her technical background combined with financial management experience will support Textron's innovation and growth.
See More
Textron's 2025 Financials Release Triggers Stock Plunge
- Financial Performance: Textron's Q4 2025 revenue rose 16% to nearly $4.18 billion, although the growth appears limited due to last year's strike impact, indicating potential recovery.
- Profitability Improvement: The company's net income increased by 24% to $307 million ($1.73 per share), aligning with analyst expectations and reflecting strong performance in its military helicopter segment.
- Guidance Below Expectations: Textron forecasts 2026 revenue of $15.5 billion, nearly 5% higher than 2025, but the adjusted EPS guidance falls short of the average analyst projection, dampening investor sentiment.
- Market Reaction: Following the earnings release, Textron's stock plummeted nearly 8%, highlighting investor concerns over future profitability despite the company's ongoing growth in the military sector.
See More
Mixed Close for US Stocks as Chipmakers Rally
- Chipmaker Strength: ASML reported record Q4 bookings of €13.2 billion, significantly exceeding the consensus of €6.85 billion, which boosted chipmakers and AI infrastructure stocks, enhancing market confidence in AI spending sustainability.
- Fed Policy Unchanged: The FOMC maintained the interest rate at 3.50%-3.75% as expected, with Chair Powell indicating strong economic performance without signaling imminent rate cuts, keeping market focus on future policy directions.
- Dollar and Gold Fluctuations: The dollar index rebounded after hitting a nearly four-year low, while President Trump's comments on dollar weakness pushed gold prices up over 3% to a new all-time high, reflecting increased demand for safe-haven assets.
- Economic Data Expectations: Initial jobless claims are expected to rise by 5,000 to 205,000 this week, and Q3 nonfarm productivity is anticipated to remain at 4.9%, indicating ongoing economic growth and potential market volatility.
See More
Mixed U.S. Stock Indices as ASML Reports Record Orders
- ASML Record Orders: ASML Holding NV reported Q4 bookings of €13.2 billion, significantly exceeding the consensus of €6.85 billion, indicating robust demand for advanced semiconductor manufacturing and reinforcing its leadership in the chip-making sector.
- Mixed Stock Performance: While the S&P 500 index reached a new all-time high and the Nasdaq 100 hit a three-month peak, market sentiment was tempered by the Federal Reserve's decision to keep interest rates steady, reflecting investor uncertainty regarding future economic policies.
- Interest Rate Policy Impact: The Fed's choice to maintain the benchmark rate between 3.5% and 3.75% ends a series of three consecutive rate cuts aimed at protecting the labor market, which may exert short-term negative pressure on the stock market.
- Market Focus: This week, the market will closely monitor new tariff news and the prospects for a continued resolution to fund the government, with initial jobless claims expected to rise by 5,000 to 205,000, highlighting the fragility of economic recovery.
See More
US Stocks Edge Up as ASML Reports Record Orders
- Market Performance: The S&P 500 index rose by 0.03%, reaching a new all-time high, while the Nasdaq 100 increased by 0.43%, reflecting strong investor confidence in tech stocks, particularly chipmakers and AI infrastructure.
- ASML Order Surge: ASML Holding NV reported record Q4 bookings of €13.2 billion, significantly exceeding the consensus of €6.85 billion, which not only solidifies the company's leadership in the semiconductor industry but also boosts market optimism regarding sustainable AI spending.
- Economic Data Impact: US MBA mortgage applications fell by 8.5% in the week ending January 23, with the purchase mortgage sub-index down 0.4% and refinancing down 15.7%, indicating pressure from high interest rates on the housing market that could affect future consumer spending.
- Political Risk Escalation: President Trump threatened new 100% tariffs on US imports from Canada and mentioned the possibility of a partial government shutdown, creating uncertainty that could negatively impact the stock market, prompting investors to closely monitor the upcoming FOMC meeting results.
See More
