Textron Inc. (NYSE:TXT) Q2 2023 Earnings Call Transcript

Scott Donnelly: Sure. Look, Jason, I think the — one of the nice parts about the market right now is this, as much as we talk about the jets and the turboprops and obviously, that’s the bulk of our business, but when you’re looking at Oshkosh, which is really a show that’s aimed around the propeller marketplace and Cessna 172s and Pipistrel electric aircraft and all that kind of good stuff, the demand is strong from top to bottom. I mean, we’re — have a great book-to-bill and our 172s, 182s, 206s. So you see really, really strong demand from that GA customer that we’ve always had. There’s very strong demand from trading schools. So if you kind of shift into your pilot discussion, there’s no doubt people have talked for many, many years about the shortages of pilots is coming up, and we’re seeing that, right?

So the training schools are putting a lot of orders in, they’re increasing the size of their fleet so they can get more pilots through. There’s a lot of activity with frankly, some of the airlines buying a lot of aircraft so that they can get pilots, not just pilots that come into the industry, but pilots that need to get the hours in order to be eligible to fly for the actual airlines. And so those hours are best built by using less expensive per hour sorts of aircraft, we have a lot of demand on that side as well. So the nice part here is it’s a robust market, everything from Cessna 172 or a small Pipistrel Velis all the way up through Longitude. So it’s — the demand is very, very broad.

Jason Gursky: Great, thank you.

Operator: Thank you. We’ll go next to the line of David Strauss with Barclays.

Bradley Barton: Hi, good morning, Scott and Frank. This is Brad Barton on for David. Quickly starting off on Bell, looks like the quarter might have been a little light, can you just talk about how much FLRAA added in the quarter and how Bell’s going to ramp from here and hitting the $3.3 billion?

Frank Connor: Sure. Look, I think Bell is pretty in line with where we expect them to be. The FLRAA program is certainly ramping. We’ve added a lot of engineering resource and we are able ramp reasonably quickly because we still had a lot of engineering talent that had been going through the FLRAA design, the CDR risk reduction programs that we’ve retained through that carrier. So, I’d say the team is ramping really well. The army has been great about working to quickly get authorizations out there for us to award contracts to our major subcontractors which is a huge part of the program obviously, as it goes out through the industrial base. They’ve authorized critical long lead materials that we needed to support the industrial flight aircraft, so the program is ramping the battle status as I can imagine ramping such a large program.

So, I think we still feel very comfortable with the guide that we provided in terms of where we’re going to end up the year on revenues that program drives a lot of the growth frankly that’s ramping up. And look, as the way they think about this program, is it’s certainly ramping her as we go through 2023, but the JDox [ph] out there, right? The next few years that’s just sort of a $1 dollar a year program. Obviously part of that is retained by the government to run their program offices and things like that, but I think we will very rapidly ramp up and the — how far exactly where we expect it to be, which is in that probably $800 million to $900 million a year of revenue.

Bradley Barton: Okay. And then just a follow-up, there has been some reports in the press about potential interest in some properties out there. Just wondering if you could talk a little bit how you see the portfolio shaping up?

Scott Donnelly: We probably won’t provide any commentary on various rumors that are out there in terms of M&A activity at this point.