The Reporting Season for the US Majors reporting results in line with expectations with defense bolstering continuing losses in civil aerospace due to the Covid outbreak, although Boeing’s loss was more than analysts predictions causing a fall in the share price.
On April 20th Reuters reported that Lockheed Martin raises outlook, beats earnings estimates.
U.S. weapons maker Lockheed Martin Corp (LMT.N) increased its outlook for 2021 sales and profit as it reported better-than-expected quarterly profits on Tuesday, helped by higher sales and profits at its unit which makes ships and helicopters.
Though the maker of the F-35 fighter jet increased the midpoint of its full-year revenue outlook slightly to $68bn, the estimate is below Wall Street’s average estimate of $68.17bn.
One big potential dampener for defense companies’ profits was removed earlier this month when U.S. President Joe Biden’s proposed a flat defense budget for 2022 despite calls from progressive Democrats to reduce Pentagon spending.
“In relation to the president’s budget, that was in line with our expectations. And we believe once we get more details, we’ll see that a lot of our programs are in line with what our customers want,” Ken Possenriede, Lockheed’s chief financial officer, said in a telephone interview.
The Bethesda, Maryland-based company said it now expects full-year earnings per share to be in the range of $26.40 per share to $26.70 per share, a range with a midpoint that would beat analysts’ expectation of $26.31 per share, according to IBES data from Refinitiv.
Net earnings for the quarter which ended on March 28 rose from $1.7bn in the same period a year ago, to $1.8bn, or $6.56 per share, beating analyst estimates of $6.31 per share.
The company’s Aeronautics segment reported 17 deliveries of its F-35 jets in the quarter, down from 22 a year earlier. Lockheed plans to deliver between 133 and 139 of the jets this year, said Possenriede.
Though net sales in the quarter rose 3.9% to $16.26bn, they were below analysts’ expectation of $16.33bn.
On April 27th Reuters reported that defense and commercial travel boosted Raytheon’s hopes for the year. U.S. aerospace manufacturer Raytheon Technologies Corp (RTX.N) on Tuesday lifted the lower end of its full-year sales forecast on strong performance of its defense unit and a recovery in commercial air travel.
Neil Mitchill, Raytheon’s newly appointed chief financial officer, said in an interview that “increasing confidence and a commercial aero recovery that we began to see take hold at the end of the first quarter” led to the company’s view for 2021.
While demand for Raytheon’s aviation technologies and service for aircraft manufacturers slumped during the global health crisis, its robust defense unit that contributes more than half of overall sales continued to lift its bottomline.
During the quarter, the company had a notable $1.4bn in classified bookings for work at Raytheon’s Intelligence and Space unit, which Mitchill said was “clearly an indication that the operations tempo is increasing from where we saw it exiting 2020.”
The company now expects between $63.9bn and $65.4bn in full-year sales, compared with its previous forecast of $63.4bn to $65.4bn.
For the quarter, Raytheon had earnings per share of $0.90 versus Wall Street analyst’s consensus estimate of $0.88. Revenue rose to $15.25bn from $11.36bn but missed Wall Street’s estimate of $15.36bn.
Net income attributable to common shareowners was $753m, or 50 cents per share, in the quarter ended March 31, from a loss of $83m, or 10 cents per share, a year earlier.
Raytheon increased its 2021 share repurchase authorization from $1.5bn to at least $2bn.
The company, which had about 195,000 employees when it merged with United Technologies last April, has laid off nearly 20,000 full-time and contract employees in its commercial aerospace business, which makes aircraft engines and spare parts. Raytheon said savings from the merger increased by $300m to $1.3bn.
On a call with Wall Street analysts, management said Raytheon was cooperating with Department of Justice investigations into contract pricing in the 2011-2013 timeframe. Management said the investigations were not expected to have a material impact. Raytheon ended the first quarter with a backlog of $147.4bn.
On April 28th, Defense News reported that the Boeing CEO points to defense and space biz as financial stabilizer. Boeing reported a wider-than-expected first-quarter loss on Wednesday, although revenue met Wall Street forecasts as the company generated cash by delivering more new airliners than it did a year ago. Boeing lost $561m — or $537m after accounting for a loss attributable to a noncontrolling interest — as the coronavirus pandemic continued to hurt demand for new planes.
After the quarter ended, Boeing suffered a new setback with its 737 Max jetliners, more than 100 of which are now parked again because of issues around electrical grounding of some parts.
CEO David Calhoun said the pandemic continues to challenge the market for planes but said the company sees 2021 as a turning point, with distribution of vaccines against COVID-19 picking up. He said Boeing’s defense and space business is providing stability for the company.
Excluding one-time items such as a charge related to a building the next Air Force One presidential jets, Boeing’s loss was $1.53 per share. Analysts expected a loss of 97 cents per share, according to a FactSet survey.
The loss was smaller than the $628m loss Boeing reported a year earlier, when the pandemic was just starting to hit the airline industry. In the first quarter of pre-pandemic 2019, the company earned $2.15bn on revenue of $22.92bn.
Revenue fell 10 percent from a year earlier, to $15.22bn, nearly matching the $15.23bn that analysts expected. Boeing generated cash when regulators in the U.S. and other countries allowed the company to resume deliveries of 737 Max jets, which were grounded for nearly two years after two crashes that killed 346 people.
Boeing delivered 77 commercial planes in the quarter, up from 50 in the same period last year, although revenue from those sales dropped.
The company’s defense and space business accounted for nearly half of Boeing revenue, and it earned a profit as revenue climbed 19 percent.
Wednesday’s report lacked the big unpleasant surprises Boeing has sometimes dropped on investors, including three months ago when it announced another delay in its newest plane, the 777X. The resumption of 737 Max deliveries has helped Boeing’s cash flow, but the pandemic is still depressing orders for new planes.
Last week, as the company met online with shareholders, it announced that the board raised Calhoun’s retirement age from 65 to 70, meaning he won’t be forced to step down next April. At the same time, Boeing said Chief Financial Officer Greg Smith, 54, will retire in July, a move that caught Wall Street off guard. Analysts speculated that Smith saw his path to the top job closed off by Calhoun’s extended term.
The shares dipped 1 percent in trading before the market opened Wednesday.
On April 29th Reuters reported that Northrop raises annual outlook as results beat on nuclear programs, radar demand. Northrop Grumman Corp (NOC.N) raised its full-year sales and earnings outlook as the U.S. weapon maker’s quarterly results topped estimates on Thursday, helped by higher demand for its nuclear programs and missile-warning radars. Shares were up slightly in pre-market trading on Thursday to $340.
U.S. President Joe Biden has proposed a flat defense budget for 2022, despite calls from progressive Democrats to cut Pentagon spending, removing a potential hurdle to profits at defense companies, including Northrop.
“Our team booked competitive new awards and generated higher sales, earnings and cash,” Chief Executive Officer Kathy Warden said in a statement.
Northrop said it now expects full-year adjusted earnings per share between $24 and $24.50, up from its prior range of $23.15 to $23.65, and above analysts’ average estimate of $23.65, according to IBES data from Refinitiv.
The company raised it 2021 sales outlook to between $35.3bn and $35.7bn from $35.1bn to $35.5bn.
Sales in Northrop’s space systems business jumped 29% to $2.52bn and operating income surged 37% to $276 m, aided by the production ramp up of its GBSD intercontinental ballistic missiles and higher demand for Next Gen OPIR missile-warning radars.
Sales in Northrop’s aeronautics systems unit, which makes the center fuselage for the F-35 jets, rose 5% to $2.99bn, while operating income increased 17% to $308m in the first quarter ended March 31.
Higher demand in the F-35 program and E-2 early warning aircraft boosted sales in the unit, the company said.
Excluding the sale of its IT services business, Northrop earned $6.57 per share in the quarter, up from $5.15 per share a year earlier, topping analysts’ average estimate of $5.48 per share.
Total sales rose 6% to $9.16bn, beating Wall Street’s estimate of $8.53bn.
The company order backlog at the end of the quarter was to $79.3bn. (Source: Reuters)
Boeing Reports First-Quarter Results
* Continued progress on safe return to service of 737 MAX; resumed 787 deliveries in late March
* Revenue of $15.2bn, GAAP loss per share of ($0.92) and core (non-GAAP)* loss per share of ($1.53)
* Operating cash flow of ($3.4)bn; cash and marketable securities of $21.9bn
* Total backlog grew to $364bn; Commercial Airplanes added 76 net orders
28 Apr 21. The Boeing Company [NYSE: BA] reported first-quarter revenue of $15.2bn, primarily driven by lower 787 deliveries and commercial services volume, partially offset by higher 737 deliveries and higher KC-46A Tanker revenue. GAAP loss per share of ($0.92) and core loss per share (non-GAAP)* of ($1.53) reflect year-over-year KC-46A Tanker improvement, higher 737 deliveries, and lower commercial airplanes period costs, partially offset by lower tax benefits and higher interest expense. Boeing recorded operating cash flow of ($3.4)bn.
“I am proud of the progress our global team made across our business in the first quarter as we continued to transform our enterprise, strengthen our safety processes, and sustain critical investments for our future,” said Boeing President and Chief Executive Officer Dave Calhoun. “While the global pandemic continues to challenge the overall market environment, we view 2021 as a key inflection point for our industry as vaccine distribution accelerates and we work together across government and industry to help enable a robust recovery. Our balanced commercial, defense, space and services portfolio continues to provide critical stability for our business – and we remain focused on safety, quality and integrity as we deliver on our customer commitments.”
Operating cash flow improved to ($3.4)bn in the quarter, reflecting timing of receipts and expenditures and higher 737 deliveries, partially offset by lower 787 deliveries and lower advance payments.
Cash and investments in marketable securities decreased to $21.9bn, compared to $25.6bn at the beginning of the quarter, primarily driven by operating cash outflows. The company refinanced $9.8 bn of debt in the quarter. Additionally, the company increased its revolving credit facilities by $5.3 bn to a total of $14.8bn, which remain undrawn.
Total company backlog at quarter-end was $364bn.
Commercial Airplanes first-quarter revenue decreased to $4.3bn, driven by lower 787 deliveries, partially offset by higher 737 deliveries. First-quarter operating margin improved to (20.1) percent, primarily due to higher 737 deliveries and lower period costs.
Boeing is continuing to make progress on the safe return to service of the 737 MAX worldwide. In addition, we are working closely with the FAA and our customers to address electrical issues identified in certain locations in the flight deck of select 737 MAX airplanes. Since the FAA’s approval to return the 737 MAX to operations in November 2020, Boeing has delivered more than 85 737 MAX aircraft and 21 airlines have returned their fleets to service, safely flying more than 26,000 revenue flights totaling over 58,500 flight hours (as of April 26, 2021). The 737 program is currently producing at a low rate and continues to expect to gradually increase production to 31 per month in early 2022 with further gradual increases to correspond with market demand. The company will continue to assess the production rate plan as it monitors the market environment and engages in customer discussions.
The company also resumed 787 deliveries in late March, following comprehensive reviews to ensure each airplane meets the company’s highest standards. During the quarter, the 787 program consolidated final assembly to Boeing South Carolina and transitioned to the previously announced production rate of 5 aircraft per month.
Commercial Airplanes continues to work closely with global regulators on all aspects of 777X development, including its rigorous test program, and the company still expects to deliver the first 777X in late 2023. As previously announced, the combined 777/777X production rate is transitioning to 2 aircraft per month.
Commercial Airplanes secured orders for 100 737 aircraft from Southwest Airlines, 25 737 aircraft from United Airlines, 23 737 aircraft from Alaska Airlines, and four 747 freighter aircraft from Atlas Air. Commercial Airplanes delivered 77 airplanes during the quarter and backlog included over 4,000 airplanes valued at $283bn.
Defense, Space & Security
Defense, Space & Security first-quarter revenue increased to $7.2bn and first-quarter operating margin increased to 5.6 percent, primarily reflecting higher KC-46A Tanker revenue due to orders for 27 aircraft and the absence of charges related to the program, partially offset by a pre-tax charge of $318m on the VC-25B program largely due to COVID-19 impacts and performance issues at a key supplier.
During the quarter, Defense, Space & Security was awarded Lots 6 and 7 contracts for 27 KC-46A Tanker aircraft for the U.S. Air Force, a contract for 11 P-8A Poseidon aircraft for the U.S. Navy and the Royal Australian Air Force, and contracts for six Bell Boeing V-22 Osprey rotorcraft for the U.S. Navy and the U.S. Air Force. Defense, Space & Security completed first flight and delivery of the F-15EX for the U.S. Air Force, successfully conducted the Space Launch System Green Run hot fire test, and began production of the T-7A Red Hawk Advanced Trainer. Other highlights for the quarter include first flight of the uncrewed Loyal Wingman aircraft for the Royal Australian Air Force and the first flight of the Japan KC-46 Tanker aircraft.
Backlog at Defense, Space & Security was $61bn, of which 31 percent represents orders from customers outside the U.S.
Global Services first-quarter revenue decreased to $3.7bn and first-quarter operating margin decreased to 11.8 percent primarily driven by lower commercial services volume due to COVID-19. During the quarter, Global Services was awarded a ground support equipment and logistics contract for the Royal Moroccan Air Force, as well as a contract for F/A-18 and AV-8B avionics equipment repair for the U.S. Navy. Global Services also delivered the 50th 737-800 Boeing Converted Freighter and inducted the EA-18G Growler for the U.S. Navy Modification Program.
Additional Financial Information
At quarter-end, Boeing Capital’s net portfolio balance was $1.9bn. The change in loss from other unallocated items and eliminations was primarily due to increased deferred compensation and share-based plan expense as compared to the first quarter 2020. Interest and debt expense increased due to higher debt balances. The first quarter 2021 effective tax rate primarily reflects a benefit from the impact of pre-tax losses largely offset by adjustments to the valuation allowance and true-ups to tax benefits previously recorded in 2020.
28 Apr 21. General Dynamics Reports First-Quarter 2021 Financial Results
– Revenue of $9.4bn, up 7.3% from year-ago quarter; growth in all four segments
– Net earnings of $708m, diluted EPS of $2.48
– Record-high backlog of $89.6bn, up 4.5% from year-ago quarter
General Dynamics (NYSE: GD) today reported first-quarter 2021 net earnings of $708m on revenue of $9.4bn. Diluted earnings per share (EPS) were $2.48.
Revenue grew year-over-year by 7.3% company-wide, with growth in all four segments and growth exceeding 10% in the Aerospace and Marine Systems segments. Company-wide operating margin for the quarter was 10%. Orders remained strong, with backlog up 4.5% from the year-ago quarter to a record $89.6bn.
Net cash provided by operating activities in the quarter totaled $3m, compared with a use of cash of $666m in the year-ago quarter. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was a net outflow of $131m. During the quarter, the company invested $134m in capital expenditures, paid $315 m in dividends, and repurchased $744m in shares at an average price of $161.38 per share, ending the quarter with $1.8bn in cash and equivalents on hand.
Total backlog at the end of first-quarter 2021 was $89.6bn, up 4.5% from the year-ago quarter. Estimated potential contract value, representing management’s estimate of value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $41.8bn. Total estimated contract value, the sum of all backlog components, was $131.4bn at the end of the quarter.
Order activity was strong across the company, with a total book-to-bill ratio (orders divided by revenue) of 1-to-1 for the quarter. Orders rose faster than revenue in the Aerospace and Technologies segments, with book-to-bill ratios for the quarter of 1.3-to-1 and 1.1-to1, respectively.
Significant awards in the quarter included a contract with a maximum potential value of $12.6bn among multiple awardees to provide information technology (IT) and technical support services to intelligence agencies under the Solutions for the Information Technology Enterprise (SITE) III program; $1.9bn from the U.S. Navy for the construction of a 10th Block V Virginia-class submarine; a contract with a maximum potential value of $805m among multiple awardees to provide ship modernization services to the Navy; $295m from the U.S. Army for various munitions and ordnance; $225m from the Army for inventory management and support services for its Stryker vehicle fleet; $200m from the Federal Emergency Management Agency (FEMA) to provide Coronavirus (COVID-19)-related contact-center operations and support services; $190m in contracts from the Army for technical support and upgrades for Abrams main battle tanks; and $175m from the Army for computing and communications equipment under the Common Hardware Systems-5 (CHS-5) program. (Source: PR Newswire)
Honeywell Overdelivers On All Guided Metrics In The First Quarter; Raises Full-Year Sales And Adjusted EPS Guidance
– Delivered Double-Digit Sales Growth in Safety and Productivity Solutions; Returned to Sales Growth in Honeywell Building Technologies
– Expanded Segment Margin in Aerospace, Honeywell Building Technologies, and Safety and Productivity Solutions
– Delivered Earnings Per Share of $2.03, Adjusted EPS¹ of $1.92, Exceeding High End of Guidance Range by 9 Cents
– Deployed $3.0bn in Capital to Acquisitions, Share Repurchases, Dividends, and Capital Expenditures
23 Apr 21. Honeywell (NYSE: HON) today announced results for the first quarter that exceeded the company’s guidance. The company also raised its full-year sales guidance and raised the midpoint of its adjusted earnings per share and cash flow guidance.
“Honeywell delivered a strong start to 2021 with first-quarter results that exceeded our expectations. We are seeing promising signs of a rapid recovery in some of our markets, and we are poised to capitalize on new business opportunities as they arise,” said Darius Adamczyk, chairman and chief executive officer of Honeywell. “We reported first-quarter sales of $8.5 bn, flat year over year, or a decline of 2% on an organic basis. Our first-quarter sales exceeded the high end of our guidance range by approximately $250m driven by continued double-digit growth in our Warehouse and Workflow Solutions and personal protective equipment businesses as well as demand for our building products and services, advanced materials, and connected software. Operating margin contracted 220 basis points for the quarter to 17.8%, with segment margin contracting 80 basis points to 21.0%, which exceeded the high end of our guidance by 10 basis points. We delivered segment margin expansion in Aerospace, Honeywell Building Technologies, and Safety and Productivity Solutions for the second consecutive quarter, supported by our streamlined cost base following the cost actions we took in 2020. We delivered earnings per share of $2.03, with adjusted earnings per share1 of $1.92, down 13% year over year but 9 cents above the high end of the previously provided guidance range. We continued to take advantage of our strong balance sheet, and deployed capital to high-return opportunities in the quarter, including closing our acquisition of quality management software leader Sparta Systems and announcing the acquisition of a majority stake in Fiplex, a leading provider of in-building communications systems. In addition, we repurchased $0.8bn in Honeywell shares and made five strategic investments through Honeywell Ventures.”
Adamczyk continued, “As we look to the rest of 2021 and beyond, we are well positioned for the recovery to come. Our new offerings in growing markets like life sciences are gaining traction and the industries that were hardest hit by the pandemic are expected to improve throughout the year. We have a robust portfolio of technologies that help our customers meet their environmental and social goals. In fact, about half of Honeywell’s new product introduction research and development investment is directed toward products that improve environmental and social outcomes for customers. Earlier this month, we pledged to become carbon neutral in our operations and facilities by 2035, building on our commitment to reduce our carbon footprint in 2024 by 10% from 2018 levels. Our confidence in this commitment is underpinned by our history of setting aggressive environmental targets and beating them, which has enabled us to reduce our greenhouse gas intensity by more than 90% since 2004. We look forward to continuing to deliver outstanding results for our shareowners, customers, and employees.”
As a result of the company’s first-quarter performance and management’s outlook for the remainder of the year, Honeywell raised its full-year sales guidance and raised the midpoint of its adjusted earnings per share and cash flow guidance. Full-year organic sales growth is now expected to be in the range of 3% to 5%. Adjusted earnings per share2 is expected to be $7.75 to $8.00, up 15 cents from the low end of the prior guidance range. Operating cash flow is now expected to be in the range of $5.8bn to $6.1bn and free cash flow is now expected to be in the range of $5.2bn to $5.5bn.
Honeywell sales for the first quarter were flat on a reported basis and down 2% on an organic basis.
Aerospace sales for the first quarter were down 22% on an organic basis driven by lower commercial aftermarket demand due to the ongoing impact of reduced flight hours, softness in commercial original equipment, and lower volumes in international defense, partially offset by growth in U.S. defense and space. Segment margin expanded 110 basis points to 29.0%. Margin performance was due to a number of factors, including commercial excellence, cost management, and a one-time benefit.
Honeywell Building Technologies sales for the first quarter were up 2% on an organic basis driven by demand for Products and growth in Building Solutions services. Orders were up mid-single digits year over year, driven by strong bookings for services and security products. Segment margin expanded 200 basis points to 22.5% driven by commercial excellence and productivity, net of inflation.
Performance Materials and Technologies sales for the first quarter were down 6% on an organic basis driven by continued delays in Process Solutions automation projects, lower volumes in smart energy, and lower demand for licensing and catalysts in UOP, partially offset by continued growth in Advanced Materials driven by strong demand for fluorine products and specialty materials. Segment margin contracted 290 basis points to 18.5% driven by the impact of sales mix, partially offset by commercial excellence.
Safety and Productivity Solutions sales for the first quarter were up 47% on an organic basis driven by double-digit Warehouse and Workflow Solutions, personal protective equipment, and Productivity Solutions and Services growth. Orders were up double digits year over year for the sixth straight quarter, led by continued demand for personal protective equipment and Productivity Solutions and Services, and backlog remained above $4bn for the third quarter in a row. Segment margin expanded 180 basis points to 14.3% driven by the impact of higher sales volumes. (Source: PR Newswire)
Lockheed Martin Reports First Quarter 2021 Results
– Net sales of $16.3bn
– Net earnings of $1.8bn, or $6.56 per share
– Generated cash from operations of $1.7bn
– Maintained backlog of approximately $147bn
– Increases 2021 financial outlook
20 Apr 21. Lockheed Martin Corporation [NYSE: LMT] today reported first quarter 2021 net sales of $16.3bn, compared to $15.7bn in the first quarter of 2020. Net earnings in the first quarter of 2021 were $1.8bn, or $6.56 per share, compared to $1.7bn, or $6.08 per share, in the first quarter of 2020. Cash from operations in the first quarter of 2021 was $1.7bn, compared to $2.3bn in the first quarter of 2020.
“Lockheed Martin continues to deliver vital next generation technologies that will help keep our nation and its allies safe, and advance space exploration, while providing long-term value for the U.S. taxpayers and our shareholders,” said Lockheed Martin Chairman, President and CEO James Taiclet. “Our strong financial results position us to continue advancing 21st Century innovations that will deter the threats of the future, while remaining a trusted partner for customers who depend on our existing platforms and services today. The men and women of Lockheed Martin have managed the challenges of COVID-19 to maintain operations safely. As we look ahead to a new and better normal, our workforce is focused on growth, ready to strengthen our foundation well into the future.”
First quarter 2021 net earnings included unrealized gains from investments held in the Lockheed Martin Ventures Fund of $68m ($51m, or $0.18 per share, after-tax) and severance and restructuring charges of $36m ($28m, or $0.10 per share, after-tax). As previously announced, the severance and restructuring charges are to close and consolidate certain facilities and reduce total workforce within the Rotary and Mission Systems (RMS) business segment. The actions are being taken to better align RMS’ organization and cost structure to improve the efficiency of its operations and affordability of its products and services.
2021 Financial Outlook
The corporation’s cash activities in the first quarter of 2021, included the following:
* making capital expenditures of $281m, compared to $293m in the first quarter of 2020;
* paying cash dividends of $739m, compared to $693m in the first quarter of 2020; and
* repurchasing 1.9m shares for $1.0bn pursuant to an accelerated share repurchase agreement (ASR), which settled in the second quarter of 2021; compared to repurchasing 1.7m shares for $756m in the first quarter of 2020, which included $500m paid pursuant to an ASR, which settled in second quarter of 2020. The total number of shares delivered under the ASRs is based on an average volume-weighted average price (VWAP) over the plan period. Based on the average VWAP, the corporation received an additional 1.0m shares upon final settlement of the 2021 ASR in the second quarter of 2021 for no additional consideration and an additional 0.4 m shares upon final settlement of the 2020 ASR in the second quarter of 2020 for no additional consideration.
The corporation operates in four business segments organized based on the nature of products and services offered: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. The following table presents summary operating results of the corporation’s business segments and reconciles these amounts to the corporation’s consolidated financial results.
Net sales and operating profit of the corporation’s business segments exclude intersegment sales, cost of sales, and profit as these activities are eliminated in consolidation. Operating profit of the corporation’s business segments includes the corporation’s share of earnings or losses from equity method investees as the operating activities of the investees are closely aligned with the operations of its business segments.
Operating profit of the corporation’s business segments also excludes the FAS/CAS pension operating adjustment described below, a portion of corporate costs not considered allowable or allocable to contracts with the U.S. Government under the applicable U.S. Government cost accounting standards (CAS) or federal acquisition regulations (FAR), and other items not considered part of management’s evaluation of segment operating performance such as a portion of management and administration costs, legal fees and settlements, environmental costs, stock-based compensation expense, retiree benefits, significant severance actions, significant asset impairments, gains or losses from divestitures, and other miscellaneous corporate activities.
The corporation recovers CAS pension cost through the pricing of its products and services on U.S. Government contracts and, therefore, recognizes CAS pension cost in each of its business segments’ net sales and cost of sales. The corporation’s consolidated financial statements must present pension and other postretirement benefit plan expense calculated in accordance with U.S. generally accepted accounting principles (referred to as FAS expense). The operating portion of the net FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension income and total CAS pension cost. The non-service FAS pension income component is included in other non-operating expense. The net FAS/CAS pension adjustment increases or decreases CAS pension cost to equal total FAS pension income (both service and non-service).
Changes in net sales and operating profit generally are expressed in terms of volume. Changes in volume refer to increases or decreases in sales or operating profit resulting from varying production activity levels, deliveries or service levels on individual contracts. Volume changes in segment operating profit are typically based on the current profit booking rate for a particular contract. In addition, comparability of the corporation’s segment sales, operating profit and operating margin may be impacted favorably or unfavorably by changes in profit booking rates on the corporation’s contracts for which it recognizes revenue over time using the percentage-of-completion cost-to-cost method to measure progress towards completion. Increases in profit booking rates, typically referred to as risk retirements, usually relate to revisions in the estimated total costs to fulfill the performance obligations that reflect improved conditions on a particular contract. Conversely, conditions on a particular contract may deteriorate, resulting in an increase in the estimated total costs to fulfill the performance obligations and a reduction in the profit booking rate. Increases or decreases in profit booking rates are recognized in the current period and reflect the inception-to-date effect of such changes.
Segment operating profit and margin may also be impacted favorably or unfavorably by other items, which may or may not impact sales. Favorable items may include the positive resolution of contractual matters, insurance recoveries and gains on sales of assets. Unfavorable items may include the adverse resolution of contractual matters; restructuring charges, except for significant severance actions which are excluded from segment operating results; reserves for disputes; certain asset impairments; and losses on sales of certain assets.
The corporation’s consolidated net adjustments not related to volume, including net profit booking rate adjustments, represented approximately 28% of total segment operating profit in the first quarter of 2021, as compared to 27% in the first quarter of 2020.
Aeronautics’ net sales in the first quarter of 2021 were comparable with the same period in 2020. Net salesincreased by approximately $135m on classified contracts due to higher volume and about $20m for the F-16 program due to increased volume on production contracts that was partially offset by decreased volume on sustainment contracts. These increases were offset by lower net sales of approximately $65m for the F-35 program primarily due to the inception-to-date effect of reducing the profit booking rate on a development contract and to a lesser extent lower volume on development and production contracts; and about $65m for the F-22 program due to decreased volume on sustainment contracts.
Aeronautics’ operating profit in the first quarter of 2021 increased $21m, or 3%, compared to the same period in 2020. Operating profit increased approximately $15m for the F-16 program due to higher risk retirements on sustainment contracts and increased volume on production contracts; and about $10m for the F-35 program due to higher risk retirements on production contracts that were mostly offset by the inception-to-date effect of reducing the profit booking rate to eliminate fees on a development contract and to a lesser extent lower volume on development and production contracts. Adjustments not related to volume, including net profit booking rate adjustments, were $25m higher in the first quarter of 2021 compared to the same period in 2020.
Missiles and Fire Control
MFC’s net sales in the first quarter of 2021 increased $130m, or 5%, compared to the same period in 2020. The increase was primarily attributable to higher net sales of approximately $120m for integrated air and missile defense programs due to increased volume (primarily Patriot Advanced Capability-3 (PAC-3)) and about $50m for tactical and strike missile programs due to higher volume (Army Tactical Missile System (ATACMS), Joint Air-to-Surface Standoff Missile (JASSM), and Long Range Anti-Ship Missile (LRASM)). These increases were partially offset by a decrease of approximately $40m for sensors and global sustainment programs due to decreased volume (primarily Low Altitude Navigation and Targeting Infrared for Night (LANTIRN®) and Sniper Advanced Targeting Pod (SNIPER®)).
MFC’s operating profit in the first quarter of 2021 was comparable to the same period in 2020. Operating profit increased approximately $30m for integrated air and missile defense programs due to higher risk retirements and increased volume (primarily PAC-3) and about $10m for tactical and strike missile programs due to higher volume (primarily JASSM and LRASM). These increases were offset by a decrease of approximately $40m for sensors and global sustainment programs due to lower risk retirements and decreased volume (primarily LANTIRN and SNIPER). Adjustments not related to volume, including net profit booking rate adjustments, were $15m lower in the first quarter of 2021 compared to the same period in 2020.
Rotary and Mission Systems
RMS’ net sales in the first quarter of 2021 increased $361m, or 10%, compared to the same period in 2020. The increase was attributable to higher net sales of $290m for training and logistics solutions programs primarily due to the delivery of an international pilot training system and about $170m for Sikorsky helicopter programs due to higher volume on production contracts (primarily VH-92A, CH-53K, and Combat Rescue Helicopter (CRH)). These increases were partially offset by decreases of about $80 m for various C6ISR (command, control, communications, computers, cyber, combat systems, intelligence, surveillance, and reconnaissance) programs due to lower volume; and about $25m for integrated warfare systems and sensors programs due to lower volume on the Littoral Combat Ship (LCS) program and the TPQ-53 program that was partially offset by higher volume on the Canadian Surface Combatant program and the Aegis Combat System (Aegis) program.
RMS’ operating profit in the first quarter of 2021 increased $57m, or 15%, compared to the same period in 2020. Operating profit increased approximately $25m for integrated warfare systems and sensors programs due to higher risk retirements (primarily Aegis) and charges on a ground-based radar program in the first quarter of 2020 that did not recur in the first quarter of 2021 that were partially offset by lower risk retirements on LCS, about $20 m for training and logistics solutions programs due to the delivery of an international pilot training system and higher risk retirements, and about $15m for Sikorsky helicopter programs due to increased volume (primarily VH-92A, CH-53K, and CRH). Adjustments not related to volume, including net profit booking rate adjustments, were $25m higher in the first quarter of 2021 compared to the same period in 2020.
Space’s net sales in the first quarter of 2021 increased $98m, or 3%, compared to the same period in 2020. The increase was primarily attributable to higher net sales of approximately $60m for the Atomic Weapons Establishment (AWE) program due to higher volume; and about $20m for Commercial Civil Space programs due to higher volume (primarily Space Transportation programs).
Space’s operating profit in the first quarter of 2021 decreased $54m, or 19%, compared to the same period in 2020. Operating profit decreased approximately $35m for National Security Space programs primarily due to lower risk retirements (primarily Advanced Extremely High Frequency (AEHF)); about $35m due to lower equity earnings from the corporation’s investment in United Launch Alliance (ULA); and approximately $10m for the AWE program as higher sales volume was more than offset by accelerated and incremental amortization expense for intangible assets due to the U.K. Ministry of Defense’s plan to renationalize the program on June 30, 2021. These decreases were partially offset by an increase of approximately $30m for Commercial Civil Space programs due to higher risk retirements and higher volume (primarily Space Transportation programs). Adjustments not related to volume, including net profit booking rate adjustments, were comparable in the first quarter of 2021 to the same period in 2020.
Total equity (losses)/earnings (primarily ULA) recognized in Space’s operating profit were approximately $(5)m, or (2)%, of Space’s operating profit in the first quarter of 2021, compared to approximately $30m, or 11%, in the first quarter of 2020.
The corporation’s effective income tax rate was 16.9% and 15.4% for the quarters ended March 28, 2021, and March 29, 2020. The rate for the first quarter of 2021 is higher due to decreased tax deductions for employee equity awards compared to the first quarter of 2020. The rates for both periods benefited from tax deductions for foreign derived intangible income, the research and development tax credit, and dividends paid to the corporation’s defined contribution plans with an employee stock ownership plan feature.
On March 11, 2021, the President signed the American Rescue Plan Act of 2021 into law which contained funding relief provisions affecting single-employer pension plans. The corporation does not expect to make a pension contribution in 2021 as previously planned. The decision not to make the planned pension contribution had an immaterial impact on its income tax expense and effective tax rate for the quarter ended March 28, 2021. The American Rescue Plan Act also contains other provisions that do not have a material impact on the corporation’s income tax expense and effective tax rate.
Northrop Grumman Reports First Quarter 2021 Financial Results
• Sales Increase 6 Percent to $9.2bn
• EPS Increase to $13.43
• Excluding $1.1bn IT Services Sale Benefit, Transaction-adjusted EPS1 Increase 28 Percent to $6.57
• Net Awards Total $8.9bn
• During the Quarter the Company Entered into a $2.0bn Accelerated Share Repurchase Agreement and Retired $2.2bn of Debt
• Company Raises 2021 Sales Guidance to $35.3 to $35.7bn and Transaction-adjusted EPS1 Guidance to $24.00 to $24.50
29 Apr 21. Northrop Grumman Corporation (NYSE: NOC) reported first quarter 2021 sales increased 6 percent to $9.2bn from $8.6bn in the first quarter of 2020. First quarter 2021 net earnings increased 153 percent to $2.2bn, or $13.43 per diluted share from $868m, or $5.15 per diluted share, in the first quarter of 2020. First quarter 2021 results reflect the IT services divestiture effective as of Jan. 30, 2021, including a net after-tax benefit of $1.1bn, or $6.86 per diluted share.
“First quarter results are a strong start to the year and a continuation of the positive performance we delivered in 2020,” said Kathy Warden, chairman, chief executive officer and president. “Our team booked competitive new awards and generated higher sales, earnings and cash. These strong operational results, coupled with portfolio shaping, enabled value-creating capital deployment for our shareholders. Based on our strong first quarter results and solid outlook for the year, we are raising 2021 sales and EPS guidance.”
First quarter 2021 sales increased $537m, or 6 percent, due to higher sales at Space Systems, Mission Systems and Aeronautics systems, partially offset by lower sales at Defense Systems principally due to the impact of the IT services divestiture. First quarter 2021 organic sales1 (total sales excluding sales attributable to the company’s IT services divestiture) increased $934m, or 12 percent. As a result of the company using a fiscal calendar convention for interim reporting periods, sales at each sector during the first quarter of 2021 benefited approximately 5 percent from three additional working days when compared to the first quarter of 2020.
Operating Income and Margin Rate First quarter 2021 operating income increased $1.9bn, or 202 percent, primarily due to the IT services divestiture, including the $2.0bn pre-tax gain on sale and $192m of unallocated corporate expense for unallowable state taxes and transaction costs.
Operating income also increased due to higher segment operating income, partially offset by a lower FAS/ CAS operating adjustment. First quarter 2021 operating margin rate increased to 30.8 percent reflecting the items above.
Segment Operating Income and Margin Rate
First quarter 2021 segment operating income1 increased $128m, or 13 percent, and reflects higher operating income at Space Systems, Aeronautics Systems and Mission Systems, partially offset by lower operating income at Defense Systems due to the impact of the IT services divestiture.
First quarter 2021 segment operating income from the IT services business was $20m as compared to $51m in the prior year period. First quarter 2021 segment operating income includes a benefit of approximately $100m due to the impact of lower overhead rates on the company’s fixed price contracts. The lower projected overhead rates were principally driven by a reduction in projected CAS pension costs as well as operational performance at the sectors, which more than offset lower business base due to the IT services divestiture. Segment operating margin rate1 increased to 12.0 percent from 11.2 percent and reflects higher operating margins at all four sectors largely as a result of the items discussed above.
Federal and Foreign Income Taxes First quarter 2021 effective tax rate increased to 27.2 percent from 17.6 percent in the prior year period primarily due to federal income taxes resulting from the IT services divestiture, including $250m of income tax expense related to $1.2bn of nondeductible goodwill in the divested business. 1 Non-GAAP measure – see definitions at the end of this earnings release.
Cash Flows First quarter 2021 cash used in operating activities was $66m as compared with $993m in the prior year period. This $927m improvement was principally due to improved trade working capital.
First quarter 2021 transaction-adjusted free cash flow1 was a use of $232m as compared with a use of $1.3bn in the prior year period. This $1.0bn improvement was principally due to improved trade working capital and lower capital expenditures during the first quarter of 2021. The net use of cash during the first quarter is reflective of the company’s historical timing of operating cash flows, which are generally more heavily weighted towards the second half of the year. Awards and Backlog First quarter 2021 net awards totaled $8.9bn and backlog was $79.3bn. Significant first quarter new awards include $2.6 bn for the Next Generation Interceptor program, $1.1bn for restricted programs, $0.5 bn for SABR, $0.4bn for F-35 and $0.2bn for G/ATOR.
Segment Operating Results
First quarter 2021 sales increased $147m, or 5 percent, due to higher sales in Manned Aircraft, partially offset by lower sales in Autonomous Systems. Manned Aircraft sales reflect higher volume on restricted programs, as well as the E-2 and F-35 production programs, partially offset by a COVID-19-related reduction in A350 production activity and lower volume on the B-2 Defensive Management Systems Modernization program as it nears completion. Autonomous Systems sales reflect lower volume on certain Global Hawk production programs as they near completion. Operating Income First quarter 2021 operating income increased $45m, or 17 percent, due to higher sales and a higher operating margin rate. Operating margin rate increased to 10.3 percent from 9.3 percent, principally due to higher net favorable EAC adjustments, which were largely driven by the previously described reduction in overhead rates.
First quarter 2021 sales decreased $319m, or 17 percent, primarily due to a $283m reduction in sales related to the IT services divestiture. First quarter 2021 organic sales decreased $36m, or 2 percent, due principally to the close-out of the contract at the Army’s Lake City ammunition plant, partially offset by higher volume on the Guided Missile Launch Rocket System and Advanced Anti-Radiation Guided Missile programs. Operating Income First quarter 2021 operating income decreased $21m, or 11 percent, primarily due to the impact of the IT services divestiture. First quarter 2021 operating income from the IT services business was $14m as compared to $36m in the prior year period. Operating margin rate increased to 11.3 percent from 10.5 percent primarily due to improved performance at Battle Management and Missile Systems.
First quarter 2021 sales increased $242m, or 10 percent, due to higher volume across the sector, partially offset by an $88m reduction in sales related to the IT services divestiture. First quarter 2021 organic sales increased $330m, or 15 percent. Airborne Multifunction Sensors sales increased principally due to higher airborne radar volume, including the Scalable Agile Beam Radar (SABR) program, and higher restricted volume. Maritime/Land Systems and Sensors sales increased primarily due to higher volume on land systems, including the Ground/Air Task-Oriented Radar (G/ATOR) program, and higher marine systems volume. Navigation, Targeting and Survivability sales increased primarily due to higher volume on targeting and navigation programs, including LITENING, as well as higher intercompany volume on the Ground Based Strategic Deterrent (GBSD) program. Networked Information Solutions sales increased primarily due to higher volume on electronic warfare programs, including the Joint Counter Radio-Controlled Improvised Explosive Device Electronic Warfare (JCREW) program, and higher restricted volume. Operating Income First quarter 2021 operating income increased $44m, or 12 percent, due to higher sales volume and a higher operating margin rate. Operating margin rate increased to 15.3 percent from 15.0 percent primarily due to higher net favorable EAC adjustments, which reflect a benefit for the previously described reduction in overhead rates and lower net favorable EAC adjustments at Networked Information Solutions.
First quarter 2021 sales increased $573m, or 29 percent, primarily due to higher sales in both the Launch & Strategic Missiles and Space business areas, partially offset by a $28m reduction in sales related to the IT services divestiture. First quarter 2021 organic sales1 increased $601m, or 32 percent. Launch & Strategic Missiles sales increased primarily due to ramp-up on GBSD and higher volume on hypersonics programs. Space sales were driven by higher volume on restricted programs, NASA Artemis programs and the Next Generation Overhead Persistent Infrared Radar (Next Gen OPIR) program. Operating Income First quarter 2021 operating income increased $74m, or 37 percent, due to higher sales volume and a higher operating margin rate. Operating margin rate increased to 10.9 percent from 10.4 percent primarily due to higher net favorable EAC adjustments, which were largely driven by the previously described reduction in overhead rates.
Effective Jan. 30, 2021, Northrop Grumman completed the divestiture of its IT services business for approximately $3.4bn in cash. The guidance below is updated for both operations and the divestiture.
Raytheon Technologies Reports First Quarter 2021 Results; Sales, Adjusted EPS and Free Cash Flow Exceeded Expectations
Raises low end of full year sales and adjusted EPS outlook; Increases share repurchase plan to at least $2bn of shares in 2021; Increases gross merger synergies to $1.3bn
27 Apr 21. Raytheon Technologies Corporation (NYSE: RTX) reported first quarter 2021 results.
First quarter 2021
* Sales of $15.3bn
* GAAP EPS from continuing operations of $0.51, which included $0.39 of net significant and/or non-recurring charges and acquisition accounting adjustments
* Adjusted EPS of $0.90
* Operating cash flow from continuing operations of $723m; Free cash flow of $336m
* Achieved approximately $200m of RTX synergies
* Resumed share repurchase program, and repurchased $375 m of shares
* Closed on the divestiture of Forcepoint for gross proceeds of $1.1bn
Raytheon Technologies updates its 2021 outlook and now anticipates the following:
Outlook for full year 2021
* Sales of $63.9 – $65.4bn, up from $63.4 – $65.4bn
* Adjusted EPS of $3.50 – $3.70, up from $3.40 – $3.70
* Share repurchases of at least $2bn, up from $1.5bn
* Confirms free cash flow outlook of approximately $4.5bn
“Raytheon Technologies delivered strong first quarter results with sales, adjusted EPS and free cash flow that were above our initial expectations, giving us the confidence to increase the low end of our sales and adjusted EPS outlook,” said Raytheon Technologies chief executive officer Greg Hayes. “Earlier this month marked the one year anniversary of our transformational merger, and our successful execution on the integration to date has enabled us to increase our gross cost synergy target by $300m to $1.3bn. Our strong cash position and positive outlook also allows us to increase our 2021 share buyback plan from $1.5bn to at least $2bn and raise our second quarter dividend by over 7 percent.”
Hayes continued, “We are confident in our outlook for the remainder of 2021. With our strong defense backlog and continued recovery in commercial air travel, we are well positioned to deliver profitable growth and return cash to drive significant value for shareowners. At the same time, we continue to invest in innovative technologies to deliver advanced solutions for our customers that differentiate us in aerospace and defense.”
Raytheon Technologies reported first quarter sales of $15.3bn. GAAP EPS from continuing operations was $0.51 and included $0.39 of net significant and/or non-recurring charges and acquisition accounting adjustments. This included $0.26 of acquisition accounting adjustments primarily related to intangible amortization, $0.10 of tax related to the Forcepoint disposition, $0.02 of restructuring, and $0.01 of other items. Adjusted EPS was $0.90. Sales and adjusted EPS were in-line with the company’s updated outlook communicated on April 9th.
The company recorded net income from continuing operations in the first quarter of $772m, which included $598m of net significant and/or nonrecurring charges and acquisition accounting adjustments. Adjusted net income was $1,370m. Operating cash flow from continuing operations in the first quarter was $723m. Capital expenditures were $387m, resulting in free cash flow of $336m.
Backlog and Bookings
Backlog at the end of the first quarter was $147.4bn, of which $82.2bn was from commercial aerospace and $65.2bn was from defense.
Notable defense bookings during the quarter included:
* $1.4bn of classified bookings at Raytheon Intelligence & Space (RIS)
* $593m for two F-135 sustainment services contracts at Pratt & Whitney
* $518m for the Advanced Medium-Range Air-to-Air Missile (AMRAAM) for the U.S. Air Force, Navy and international customers at Raytheon Missiles & Defense (RMD)
* $247m to provide Patriot engineering services for the U.S. Army and international customers at RMD
* $227m on a missile warning and defense contract at RIS
* $199m for an international tactical airborne radar sustainment contract at RIS
In addition, during the quarter, RMD’s industry team was down-selected for the Next Generation Interceptor award.
The company’s reportable segments are Collins Aerospace, Pratt & Whitney, Raytheon Intelligence & Space (RIS) and Raytheon Missiles & Defense (RMD). In connection with the merger, the company revised its segment presentation. Prior periods have been revised to reflect the current presentation. Refer to the accompanying tables for further details.
1st Quarter Collins Aerospace had first quarter 2021 adjusted sales of $4,370m, down 32 percent versus the prior year. Commercial OE was down 45 percent, commercial aftermarket was down 43 percent, and military was down 3 percent. Excluding the impact of the prior year Military GPS and Space ISR divestitures and FX, military was up 4 percent in the quarter. The expected decrease in commercial sales was driven primarily by the current environment which has resulted in lower flight hours, aircraft fleet utilization and commercial OEM deliveries.
Collins Aerospace recorded adjusted operating profit of $332m in the quarter, down 74 percent versus the prior year. The expected decrease in adjusted operating profit was driven by lower commercial aerospace aftermarket and OEM sales volume, as well as the impact of the Military GPS and Space ISR divestitures. This was partially offset by cost reduction actions.
Pratt & Whitney
Pratt & Whitney had first quarter 2021 adjusted sales of $4,030m, down 24 percent versus the prior year. Commercial OE was down 40 percent and commercial aftermarket was down 35 percent, while military was up 1 percent. The expected decrease in commercial sales was primarily due to a significant reduction in shop visits and related spare part sales, and commercial engine deliveries principally driven by the current environment.
Pratt & Whitney recorded adjusted operating profit of $40m in the quarter, down 92 percent versus the prior year. The expected decrease in adjusted operating profit was primarily driven by lower commercial aftermarket sales volume and unfavorable mix. This was partially offset by cost reduction actions.
Raytheon Intelligence & Space
RIS had first quarter adjusted sales of $3,765m and adjusted operating profit of $388m.
Raytheon Missiles & Defense (RMD)
1st Quarter RMD had first quarter adjusted sales of $3,793m and adjusted operating profit of $496 m.
Raytheon Technologies updates its 2021 outlook and now anticipates the following:
Outlook for full year 2021
* Sales of $63.9 – $65.4bn, up from $63.4 – $65.4bn
* Adjusted EPS of $3.50 – $3.70, up from $3.40 – $3.70
* Share repurchases of at least $2bn, up from $1.5bn
* There is no change in the company’s previously provided 2021 expectations for:
* Free cash flow of approximately $4.5bn
Outlook for Q2 2021
* Sales of $15.5 – $16.0bn
* Adjusted EPS of $0.90 – $0.95
TEXTRON REPORTS FIRST QUARTER 2021 RESULTS
* EPS of $0.75; adjusted EPS of $0.70
* Operating margin of 8.9%, up from 5.6% a year ago
* Revenue up $102m, or 3.7% from prior year
* Net cash from operating activities of $107m, up $500 m from prior year
* Aviation backlog $2.1bn, up $452 m from year-end 2020
* Full-year adjusted EPS outlook raised by $0.10
29 Apr 21. Textron Inc. (NYSE: TXT) today reported first quarter 2021 net income of $0.75 per share. Adjusted net income, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $0.70 per share for the first quarter of 2021, compared to $0.35 per share in the first quarter of 2020.
“Revenues were higher in the quarter primarily driven by higher volumes at Industrial and Bell, with solid margin performance across all our segments,” said Textron Chairman and CEO Scott C. Donnelly. “We also saw improving commercial aircraft demand at both Aviation and Bell in the quarter.”
Net cash provided by operating activities of continuing operations of the manufacturing group for the first quarter was $107m, compared to a cash outflow of $393m last year. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, totaled $71m compared to a use of cash of $430m last year. In the quarter, Textron returned $91m to shareholders through share repurchases.
Textron now expects 2021 earnings per share from continuing operations to be in a range of $2.76 to $3.00, or $2.80 to $3.00 on an adjusted basis, up $0.10 from our previous outlook. Textron reiterated its expectation for cash flow from continuing operations of the manufacturing group before pension contributions of $600 to $700m with planned pension contributions of about $50m.
Donnelly continued, “With a strong start to the year, we expect to see continuing improvements in commercial demand across our end-markets.”
First Quarter Segment Results
Revenues at Textron Aviation of $865m were down $7m from the first quarter of 2020, due to lower volume, primarily reflecting lower aftermarket volume, partially offset by higher pricing.
Textron Aviation delivered 28 jets, up from 23 last year, and 14 commercial turboprops, down from 16 last year.
Segment profit was $47m in the first quarter, up $44m from a year ago, primarily due to a favorable impact from performance of $25m and a favorable mix of products sold.
Textron Aviation backlog at the end of the first quarter was $2.1bn.
Bell revenues were $846m, up $23m from last year, on higher commercial revenues of $66m, partially offset by lower military revenues. Bell delivered 17 commercial helicopters in the quarter, up from 15 last year.
Segment profit of $105m was down $10m, primarily due to an unfavorable impact from performance reflecting higher research and development costs in the quarter, largely related to the future vertical lift programs. Bell backlog at the end of the first quarter was $5.2bn.
Revenues at Textron Systems were $328m, flat with last year. Segment profit of $51m was up $25m from a year ago, primarily due to a favorable impact from performance and other of $27m. Textron Systems’ backlog at the end of the first quarter was $2.4bn.
Industrial revenues were $825m, an increase of $85m from last year, primarily due to higher volume and mix of $47m and a favorable impact of $20m from pricing, primarily in the Specialized Vehicles product line, and $18m from foreign exchange rate fluctuations. Segment profit of $47m was up $38m from the first quarter of 2020, reflecting higher volume and mix of $16m, favorable pricing, net of inflation of $11m and favorable performance of $11m, largely in the Specialized Vehicles product line.
Finance segment revenues were up $1m, and profit was up $3m from last year’s first quarter.