Textron Inc. (NYSE:TXT) Q1 2024 Earnings Call Transcript

They slowed down last year and we did make some adjustments based on that, but we’ve seen further slowing of that. But yes, I don’t know how to categorize whether it’s the same customer or not, but certainly those product categories have slowed down and everything from pistons up into light jets has not. And of course that’s a much bigger, much more important business to us, which is good, I suppose.

Kristine Liwag: Great. Thanks, Scott. I’ll keep it to one.

Scott Donnelly: Sure.

Operator: Next, we go to Gavin Parsons with UBS. Please go ahead.

Gavin Parsons: Thanks. Good morning.

Scott Donnelly: Good morning.

Frank Connor: Good morning.

Gavin Parsons: I just want to confirm if I heard the restructuring savings are expected at 185, given I think the initial plan was 75, and just what’s driving the better number there?

Scott Donnelly: Yes. You know, that’s a full kind of run rate when we get through it all. And it’s really driven by the addition of headcount reductions. The unanticipated Shadow and FARA and then the additional actions at industrial are really focused on headcount where the original restructuring had some asset impairment in it and so we’re getting a much bigger run rate savings as a result of those reductions to kind of right-size those activities.

Gavin Parsons: Got it, okay. What is the transition from shadow to FTUAS look like in terms of revenue and margins over the time frame?

Scott Donnelly: Well, look I think that’s still a little bit to be determined. When the Army canceled the Shadow program, they did say they wanted to move more aggressively on FTUAS. We have seen that in the awards now of Option 3 and 4, which is good. There aren’t, I don’t think, formally published dates. But the dates that we hear about in terms of when they’ll put a RFP out on the street for the ultimate EMD production decisions, sounds like they’re probably pulling that forward to where that RFP could come out as early as even late this year, which would lead to an early ‘25 calendar year award, which would be great. So the exact size and scope and therefore the revenue and the margin is, we just don’t have visibility to that at this point.

Gavin Parsons: That’s helpful. Thanks.

Operator: This conference is being recorded for digitized replay and will be available after 10 a.m. Eastern Time today through April 25, 2025. You may access the replay by dialing 866-207-1041 and enter the access code 8546032. This does conclude our conference for today. Thank you for your participation. You may now disconnect.