Textron CFO Says MV-75 Charge Would Rise To 110 To 150 If Production Award Slips Into Next Year
Bell's Army aircraft program faces a bigger negative charge if the first production award moves past the first quarter, the CFO said.
Textron's expected negative charge on the first low-rate production contract for Bell's MV-75 Army aircraft would probably rise to "110 to 150" if the award pushes into next year, Chief Financial Officer David Rosenberg said on the company's earnings call Thursday. The earlier range was $60 million to $110 million, according to a TD Cowen analyst's question, and the company reported third-quarter revenue of $3.8 billion on the same call.
A possible slip in the production award
Asked by the TD Cowen analyst whether the $60 million to $110 million figure still held, Rosenberg said a continuing resolution, the stopgap funding that holds spending at prior levels, at the start of the fiscal year could push the timing of the production award. Management had previously expected it from the fourth quarter into the first quarter of next year.
Beyond that, he said, program accounting means the range "will probably increase." He put it at "110 to 150" if the award does move into next year; he did not state the unit, and the analyst's reference was in millions.
Rosenberg said Textron reversed none of the charges it took in the second quarter, when it booked a negative adjustment tied to the funding delay. Congress approved the $350 million reprogramming request during the third quarter, and about $300 million was obligated through contract modifications. Pieces of the approved amount convert to contract changes over time, he said, and as the remaining ones land the company can revisit earlier charges.
Bell, which supplies military and commercial helicopters and tiltrotor aircraft, had third-quarter revenue of $933 million, down 9%, with lower MV-75 volume the main driver of a $59 million drop in military revenue.
Funding calendar and the 2027 budget
CEO Lisa Atherton said the government holds discretionary funds up to the full reprogramming request, and can use them as 2026 spending requires. The continuing resolution expires December 11, she said, and the 2027 budget reflects about $2.3 billion for the program, supported across four subcommittees.
Rosenberg said fourth-quarter spending should be steady, as already built into guidance. How 2027 looks depends on how funding moves from a continuing resolution to an approved defense budget.
Raised outlook around the program
Textron, a multi-industry maker of aircraft, helicopters, defense systems and industrial products, reported adjusted earnings of $1.76 a share, against $1.55 a year earlier. It raised its full-year adjusted earnings outlook to $6.55 to $6.65 from $6.40 to $6.60, and its manufacturing cash flow outlook to $800 million to $900 million from $700 million to $800 million. Rosenberg said lower capital spending of about $100 million was the biggest driver of the cash-flow raise.
Textron Aviation revenue rose 14%, with 51 jets delivered in the quarter. Atherton said the industrial segment separation remains on the timeline set in April.
The next marker is December 11, when the continuing resolution expires and Congress's budget action will show whether the award slips past the first quarter.
Sources
- Textron Non-GAAP EPS of $1.76 beats by $0.32, revenue of $3.8B beats by $30M (TXT:NYSE) | Seeking Alpha — seekingalpha.com
- Textron Reports Third Quarter 2026 Results; Raises Full Year Adjusted EPS and Cash Flow Outlook – Company Announcement - FT.com — Financial Times
- Textron (TXT) Q3 Earnings Beat Estimates — Yahoo Finance
- Textron: Q3 Earnings Snapshot | wusa9.com — Associated Press
- Textron: Q3 Earnings Snapshot | khou.com — Associated Press
