Textron missed Wall Street estimates for the fourth quarter as aircraft shipments fell. The maker of business jets and defense aircraft and equipment joined General Electric and Raytheon Technologies in providing light guidance. Textron stock fell sharply Thursday, but GE stock and Raytheon gained after General Electric tumbled earlier this week.
GE's businesses are seeing momentum as the key aviation segment recovers and its end markets strengthen, CEO Larry Culp said in Tuesday's earnings release. But the company flagged commodity price inflation and supply-chain disruptions as key challenges. Analysts expect those pressures to last through at least the first half of 2022.
Textron Earnings, Textron Stock
Estimates: Analysts expected Textron earnings to fall 10% to 95 cents. Sales were seen falling 6% to $3.435 billion.
Results: Textron earnings per share declined to 94 cents. Revenue fell 9% to $3.322 billion. Textron's aviation unit, which makes the Cessna jet, delivered 46 jets in Q4, down from 61 a year ago, and 43 commercial turboprops, down from 61. Lower volumes came amid supply chain challenges, including the chip shortage.
Outlook: Textron forecasts 2022 revenue of $13.3 billion and 2022 earnings per share of $3.80-$4. Both came in below FactSet analyst estimates.
TXT stock lost 7.1% Thursday. Shares managed a 0.2% gain for the week through Wednesday. Last Friday, Textron stock triggered the automatic sell rule by falling more than 8% below a 78.23 buy point, following a breakout attempt in early January.
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General Electric Earnings, GE Stock
Estimates: Early Tuesday, Wall Street forecast GE earnings of 85 cents per share, up 32%, on revenue of $21.308 billion, down 3%, according to FactSet.
Results: GE earnings jumped to 92 cents, but revenue fell 3% to $20.303 billion. Q4 revenue fell 4% in health care; 5% in renewable energy; and 10% in power. It rose 4% in aviation.
Orders were down 4% in Q4 but rose 12% for the full year.
Outlook: GE sees adjusted EPS of $2.8-$3.50 for 2022, below analyst consensus. The company cited inflationary pressures. It also expects revenue growth in the high single digits and free cash flow to improve to $5.5 billion-$6.5 billion, driven by strength in power and health care.
The 2022 outlook assumes continued recovery in aviation, and improvements in the other industrial segments, offset by some adverse impact in onshore wind.
Shares gained 0.65% in Thursday's stock market trading after sinking 6% for the week through Wednesday. GE stock is well off a 116.27 buy point. GE stock, after undercutting the 50-day line. The relative strength line for GE stock is lagging again, according to MarketSmith chart analysis, after rallying for parts of 2020 and 2021 from a long-term downtrend.
Defense Stocks: Lockheed Beats; General Dynamics, Northrop Mixed
GE announced plans in November to divide into three publicly traded companies. It will emerge as aviation play under the General Electric name in 2024, after spinning off its health care and power, including renewable energy, businesses.
Raytheon Technologies Earnings, Raytheon Stock
Estimates: Analysts expected Raytheon earnings to jump 38% to $1.02. Sales were seen rising 4% to $17.295 billion.
Results: Raytheon earnings came in at $1.08 a share while sales were at $17 billion. Sales fell 2% at Intelligence & Space; 8% at Missiles & Defense. But sales rose 13% at Collins Aerospace and 15% at Pratt & Whitney.
Outlook: Raytheon sees 2022 adjusted EPS of $4.60-$4.80 with revenue of $68.5 billion-$69.5 billion, both below analyst targets.
Raytheon edged up 0.3% after losing 1.5% for the week through Wednesday. On Tuesday, shares of the aviation pure play climbed 2.5% Tuesday on earnings, rebounding from the 50-day and 200-day lines. RTX stock is working on a 92.48 high handle entry. And even in the midst of a recent decline, the RS line for Raytheon stock is improving.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
