Textron's Profit Forecast Falls Short; IAM Strike Impacts Jet Deliveries

Textron Inc. (TXT), a leading aerospace and defense company, has forecasted a lower-than-expected profit for 2025, citing the impact of the International Association of Machinists and Aerospace Workers (IAM) strike and demand softness in its industrial segment. The company's shares fell nearly 4% in pre-market trading following the announcement.

On an adjusted basis, Textron expects 2025 earnings per share (EPS) to range between $6.00 and $6.20, compared to analysts' estimates of $6.40. The IAM strike at its Wichita facility during the previous quarter continued to impact aircraft deliveries in the fourth quarter, with jet deliveries falling by 35.6% year-over-year to 32 units. Commercial turboprop deliveries also decreased by 13.6% to 38 units.

Total revenue for the quarter ended Dec. 28 fell by 7.2% year-over-year to $3.61 billion, missing analysts' estimates of $3.81 billion. The industrial segment experienced a 9.6% decline in quarterly revenue, as inflationary pressure and competition from Chinese alternatives affected sales in its specialized vehicles product line.

Earlier this month, Textron announced it was exploring strategic alternatives for its specialized vehicles unit's Powersports product line due to persistent demand weakness and has paused production for the same. The company posted fourth-quarter adjusted EPS of $1.34, in line with analysts' estimates of $1.33 per share.

Textron now expects full-year 2025 revenue of about $14.7 billion, compared to analysts' estimate of $14.75 billion. The company's strategic review of its Powersports product line and the ongoing impact of the IAM strike on its aviation segment will be crucial factors in determining its financial performance in the coming years.

Textron's strategic review of its Powersports product line could lead to a divestment or restructuring of the unit, which may result in a one-time gain or loss for the company. However, the long-term impact on financial performance will depend on the outcome of the review and the company's ability to refocus its resources on more profitable segments.

The IAM strike at Textron's Wichita facility has had a significant impact on the aviation segment, with a 35.6% decrease in jet deliveries from 50 in Q4 2024 to 32 in Q4 2025. This decline in deliveries can have long-term effects on Textron's aviation segment, including delayed revenue recognition, potential loss of market share, and damage to reputation. To mitigate these impacts, Textron should work towards resolving the labor dispute with the IAM union, diversify production, invest in automation and technology, strengthen relationships with customers, and review and adjust its pricing strategy.

In conclusion, Textron's profit forecast for 2025 has fallen short of analysts' expectations, primarily due to the impact of the IAM strike on its aviation segment and demand softness in its industrial segment. The company's strategic review of its Powersports product line and the ongoing impact of the strike will be crucial factors in determining its financial performance in the coming years. Textron must address these challenges and find ways to improve its competitiveness in these segments to boost its overall revenue growth.