Textron's Q4 2024: Diverging Views on Aviation Recovery, Systems Growth, and Margin Outlook

Revenue and Profit Decline:
- Textron reported revenues of $3.6 billion for Q4 2024, down from $3.9 billion in the previous year's fourth quarter, and segment profit in the quarter was $283 million, down $101 million from the fourth quarter of 2023.
- This decline was attributed to work stoppages in the aviation segment and softness in specialized vehicles end markets.

Aviation Segment Challenges and Recovery:
- The aviation segment experienced lower revenues and operating profit due to a work stoppage, with adjusted income from continuing operations dropping to $1.34 per share from $1.60 in the previous year's fourth quarter.
- However, the segment ended the year with a backlog of $7.8 billion, up $676 million from 2023, driven by new product launches and contract awards.

Bell Segment Growth:
- Bell saw significant growth, with revenues up 13.7% for the year, primarily driven by the expansion of the FARA program, contributing to a 13.5% segment profit margin.
- This growth was supported by a follow-on award for the FLRAA program and increased commercial order activity.

Bell's Margin Resilience:
- Despite increased production and delivery, Bell's margin remained resilient, primarily due to strong military program performance and cost management.
- The margin is expected to be slightly diluted in 2025 due to increased FLRAA and commercial delivery volumes, which are typically margin-dilutive.