Textron (TXT) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue rose 12% to $3.7 billion, driven by strong growth in Aviation and Bell military programs, while Industrial segment sales declined slightly.

• Adjusted EPS increased 13% to $1.45, GAAP EPS was $1.25, and net income rose to $220 million.

• Announced intent to separate the Industrial segment within 12–18 months, exploring sale or tax-free spin-off, to create a pure-play Aerospace & Defense company.

• Returned $168 million to shareholders via share repurchases in Q1 2026.

• Segment realignment integrated eAviation into other segments for operational efficiency.

Financial highlights

• Segment profit was $320 million, up 10% year-over-year, with segment profit margin at 8.7%.

• Adjusted net income (non-GAAP) was $256 million, up from $235 million.

• Manufacturing cash flow before pension contributions was a use of $228 million, compared to $158 million last year.

• Operating cash outflow improved to $107 million from $114 million last year.

• Adjusted EBITDA for Q1 2026 was $431 million, up from $386 million in Q1 2025.

Outlook and guidance

• Targeting completion of Industrial segment separation within 12–18 months, subject to approvals and market conditions.

• New Textron post-separation expects $12 billion in revenue, $1.2 billion in segment profit, and 2026E segment profit margin at 10.7%.

• Sequential improvements in deliveries and margins expected throughout the year, with margin peak in Q4.

• MV-75 Cheyenne revenue expected to be flat year-over-year unless additional Army funding is secured; potential for $60–$110 million unfavorable adjustment upon LRIP award.

• 2026 full-year adjusted EPS guidance raised to $6.40–$6.60; manufacturing cash flow before pension contributions expected between $700 million and $800 million.