US Defense Majors Maintain Forecasts Despite Tariffs By Julian Nettlefold

US Defense Majors Maintain Forecasts Despite Tariffs

By Julian Nettlefold

Reuters reported that the US defense contractors mostly maintain forecasts despite Trump tariffs. Major U.S. defense contractors are mostly maintaining their financial forecasts for 2025, saying it is too soon to understand the impact of U.S. President Donald Trump’s tariffs.

Lockheed Martin, the largest defense firm, reaffirmed its forecasts for the year on Tuesday, buoyed by resilient demand for its missile systems and fighter jets. Similarly, Northrop Grumman said its profit margins may narrow, but stuck with its sales prediction, indicating some confidence in the face of trade tensions.

 

Boeing

 

23 Apr 25.  The Boeing Company [NYSE: BA] recorded First Quarter 2025  Results

• 737 production gradually increased in the quarter; still expected to reach 38 per month this year
• Revenue increased to $19.5bn primarily reflecting 130 commercial deliveries
• GAAP loss per share of ($0.16) and core (non-GAAP)* loss per share of ($0.49)
• Operating cash flow of ($1.6)bn and free cash flow of ($2.3)bn (non-GAAP)*

 

Total company backlog grew to $545bn, including over 5,600 commercial airplanesBoeing Reports First

Quarter Results

The Boeing Company [NYSE: BA] recorded first quarter revenue of $19.5bn, GAAP loss per share of ($0.16) and core loss per share (non-GAAP)* of ($0.49). The company reported operating cash flow of ($1.6)bn and free cash flow of ($2.3)bn (non-GAAP)*. Results primarily reflect improved operational performance and commercial delivery volume. Results also reflect only tariffs enacted as of March 31.

First Quarter 2025

• 737 production gradually increased in the quarter; still expected to reach 38 per month this year
• Revenue increased to $19.5bn primarily reflecting 130 commercial deliveries
• GAAP loss per share of ($0.16) and core (non-GAAP)* loss per share of ($0.49)
• Operating cash flow of ($1.6)bn and free cash flow of ($2.3) bn (non-GAAP)*

Total company backlog grew to $545bn, including over 5,600 commercial airplanes

 

“Our company is moving in the right direction as we start to see improved operational performance across our businesses from our ongoing focus on safety and quality,” said Kelly Ortberg, Boeing president and chief executive officer. “We continue to execute our plan, are seeing early positive results and remain committed to making the fundamental changes needed to fully recover the company’s performance while navigating the current environment.”

 

Cash and investments in marketable securities totaled $23.7bn, compared to $26.3bn at the beginning of the quarter, primarily driven by the free cash flow usage in the quarter. Debt was $53.6bn, down from $53.9bn at the beginning of the quarter due to the pay down of maturing debt. The company maintains access to credit facilities of $10.0bn, which remain undrawn. Total company backlog at quarter end was $545bn.

Segment Results

Commercial Airplanes

The 737 program gradually increased production in the quarter and maintains plans to reach 38 per month this year. The 787 program continued to stabilize production at five per month in the quarter and still expects to increase to seven per month this year. The 777X program began expanded FAA certification flight testing in the quarter, and the company still anticipates first delivery of the 777-9 in 2026.

Commercial Airplanes booked 221 net orders in the quarter, including 20 777-9 and 20 787-10 airplanes for Korean Air and 50 737-8 airplanes for BOC Aviation. Commercial Airplanes delivered 130 airplanes during the quarter and backlog included over 5,600 airplanes valued at $460 bn.

Defense, Space & Security

Global Services first quarter revenue was $5.1bn. First quarter operating margin of 18.6 percent reflects favorable performance and mix.  In the quarter, Global Services delivered the 100th 767-300 Boeing Converted Freighter to SF Airlines and received a modification contract from the U.S. Air Force to integrate electronic warfare systems for the F-15 Eagle. In April, the company entered an agreement to sell portions of its Digital Aviation Solutions business, and the transaction is expected to close by the end of 2025 subject to regulatory approval and customary closing conditions.

On Apr 22nd Boeing [NYSE: BA] entered into a definitive agreement to sell portions of its Digital Aviation Solutions business, including its Jeppesen, ForeFlight, AerData and OzRunways assets, to Thoma Bravo, a leading software investment firm. This all-cash transaction is valued at $10.5bn.

Boeing will retain core digital capabilities that harness both aircraft and fleet-specific data to provide commercial and defense customers with fleet maintenance, diagnostics and repair services. This digital expertise will continue to provide predictive and prognostic maintenance insights.

“This transaction is an important component of our strategy to focus on core businesses, supplement the balance sheet and prioritize the investment grade credit rating,” said Kelly Ortberg, Boeing president and chief executive officer. This enables all parts of the digital portfolio to focus on their strengths,” said Chris Raymond, president and chief executive officer of Boeing Global Services. “Our commitment to meeting our customers’ needs is unwavering as we move forward with our core products and services to support their fleets. We are proud to be investing in such an important technology platform in the broader aerospace and defense industry,” said Holden Spaht, a Managing Partner at Thoma Bravo. “With a heritage dating back to the 1930s, Jeppesen has been at the forefront of technological innovation for nearly a century. We are excited to build on this track record and power its next phase of growth. The business has been through an impressive growth transformation in recent years and has strong momentum,” said Scott Crabill, a Managing Partner at Thoma Bravo. “Thoma Bravo has a long track record of backing leading technology companies in partnership with existing management. We look forward to supporting the company’s standalone growth objectives through strategic investments, operational best practices and a shared commitment to innovation and long-term value creation.”

Approximately 3,900 employees around the globe work in Boeing’s Digital Aviation Solutions organization, which includes elements of the business remaining within Bn and those included in the sale. Boeing is working with Thoma Bravo to help ensure as seamless of a transition as possible for employees while continuing to meet the needs of customers in accordance with all obligations. The transaction is expected to close by the end of 2025 and is subject to regulatory approval and customary closing conditions.

Citi is acting as exclusive financial advisor to Boeing, and Mayer Brown LLP is acting as outside counsel. Kirkland & Ellis LLP is acting as legal counsel to Thoma Bravo.

About Thoma Bravo

Thoma Bravo is one of the largest software-focused investors in the world, with over US$179 bn in assets under management as of December 31, 2024. Through its private equity, growth equity and credit strategies, the firm invests in growth-oriented, innovative companies operating in the software and technology sectors. Leveraging Thoma Bravo’s deep sector knowledge and strategic and operational expertise, the firm collaborates with its portfolio companies to implement operating best practices and drive growth initiatives. Over the past 20+ years, the firm has acquired or invested in approximately 520 companies representing approximately US$275 bn in enterprise value (including control and non-control investments). The firm has offices in Chicago, Dallas, London, Miami, New York and San Francisco. For more information, visit Thoma Bravo’s website at thomabravo.com.

 

General Dynamics

24 Apr 25. General Dynamics beats results estimates on sustained defense demand, aerospace recovery. General Dynamics reported a 27% rise in first-quarter profit on Wednesday, driven by recovery in its aerospace segment as well as sustained strength in its defense business.

The aerospace unit, which makes Gulfstream business jets, posted a 45% increase in revenue in the reported quarter, compared to the same quarter a year ago. The company’s new Gulfstream G800 jet received certifications from the Federal Aviation Administration and the European Union Aviation Safety Agency on April 16. The aircraft can seat up to 15 passengers and has a maximum range of 8,200 nautical miles, according to the company’s website. The defense giant, however, reported that its business jet orders fell compared with the previous quarter. (Source: Reuters)

 

23 Apr 25.  General Dynamics (NYSE: GD) today reported first-quarter 2025 operating earnings of $1.3 bn, or $3.66 per diluted share (EPS), on revenue of $12.2 bn. Compared with the year-ago quarter, operating earnings increased 22.4%, diluted EPS increased 27.1%, and revenue increased 13.9%. Operating margin of 10.4% was a 70-basis-point expansion from the year-ago quarter.

• Revenue of $12.2bn, up 13.9% from year-ago quarter
• Diluted EPS of $3.66, up 27.1% from year-ago quarter
• 70 basis-point margin expansion from year-ago quarter
• Aerospace earnings up 69.4% with 210-basis-point margin expansion over year-ago quarter

Each of the four segments saw increases in revenue and operating earnings over the year-ago quarter, with notable increases in Aerospace, where revenue was up 45.2%, operating earnings up 69.4%, and margins expanded 210 basis points to 14.3%.

“We continue to see steady growth and improvement in operating performance across the defense portfolio,” said Phebe Novakovic, chairman and chief executive officer “The Aerospace segment saw a significant increase in profitability, reflecting the manufacturing efficiencies associated with reaching higher levels of production on our new aircraft models.”

Cash and Capital Deployment

Net cash used by operating activities in the quarter was $148m due to growth of working capital. During

the quarter, the company paid $383 m in dividends, invested $142m in capital expenditures, and used $600 m to repurchase shares. The company ended the quarter with $9.6bn in total debt and $1.2bn in cash and equivalents on hand. On March 5, the General Dynamics board declared a regular quarterly dividend of $1.50 per share, a 5.6% increase over last year’s dividend and the 28th consecutive annual increase.

Orders and Backlog

On a company-wide basis, orders in the quarter totaled $10.2bn, and backlog at the end of the quarter was $88.7bn. Estimated potential contract value, representing management’s estimate of additional value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $52.7bn. Total estimated contract value, the sum of all backlog components, was $141.3bn.

 

Lockheed Martin Corp 

22 Apr 25. Lockheed Martin’s quarterly profit rises on resilient defense demand. Lockheed Martin (LMT.N) reported a higher first-quarter profit on Tuesday and reaffirmed its forecasts for the year on the back of resilient demand for its missile systems and fighter jets. Shares of Lockheed were up 3% in pre-market trading on Tuesday as the company posted earnings per share of $7.28 beating Wall Street analyst expectations of $6.34.

U.S. President Donald Trump’s trade war has rattled markets and upset some allies. For example Canada, which is hit by steep tariffs, has ordered a review of a C$19bn contract for 88 of Lockheed Martin’s F-35 jets, with Prime Minister Mark Carney saying the country relies too much on the U.S. for security.

Still, defense contractors have benefited from a surge in demand for weapons against the backdrop of the war in Ukraine and conflicts in the Middle East.

Legacy companies in the sector are also expected to get a potential boost from U.S. President Donald Trump’s review of military equipment export rules that he is seeking to ease. Lockheed’s aerospace business, which makes the F-35 fighter jet, posted a 3.1% rise in sales in the first quarter. The F-35 program has been beset by delays in rolling out a technology upgrade to give the jet better displays and processing capabilities for its electronic systems. (Source: Reuters)

 

23 Apr 25.  Lockheed Martin Corp: Regaining Bellwether Status; Moving to Defense Top Pick.
We are moving LMT to our Top Pick in Defense. Higher defense exports and the new Golden Dome initiative provide meaningful opps. for LMT, in our view. Efforts to harvest NGAD investment for lower-cost solutions also appear promising. Reiterate OW / $575 PT.

Key takeaways

• Despite a sizeable 1Q25 EPS beat, LMT reiterated its 2025 guide, suggesting conservatism, in our view.
• We see LMT mostly insulated from tariff risk given its domestic supply base and ability to pass through higher costs.
• Efforts to harvest NGAD investment for a ‘5th-gen-plus’ F-35 may align well with DoD emphasis on procuring next-gen capability more affordably.

Moving to Top Stock Pick

LMT’s 1Q25 EPS bested MSe/cons. estimates by ~14%/~16%, driven by a solid topline beat and notable operating performance at RMS and Space Systems. Despite its 1Q25 earnings beat, LMT reaffirmed full-year guidance as it weighs 1Q strength against risk presented by tariffs and as it fully digests its recent Next Generation Air Dominance (NGAD) loss. LMT’s 2025 guidance appears conservative, in our view, following 1Q25 results given US defense Primes are largely insulated from tariff pressures due to a predominantly domestic supply chain and the ability to pass through higher costs under cost-plus (40% of LMT portfolio) and even fixed-price (60%) contracts. Meanwhile, we see significant opportunities ahead for LMT with elevated global demand for defense products (~30% of LMT backlog is international) and the current administration’s accelerated pursuit of a Golden Dome missile defense system, which we see playing to LMT’s strength in sensors, effectors, and command & control. What’s more, not all is lost in NGAD as LMT is actively working to harvest 6th-gen aircraft investments to boost existing platforms (i.e., morphing the F-35 into a “5th-gen-plus” aircraft), which would offer cutting-edge capability at a potentially lower cost point. A “chargeless” 1Q25 also re-instills confidence in program management. We move LMT to our Top Pick in Defense. Remain OW / reiterate our $575 PT.

Repurposing NGAD Investments

We see LMT making lemonade out of its recent NGAD loss. Management indicated it does not plan to protest the award, but instead is focused on harvesting its investments to date in the program to infuse current platforms (e.g., F-35, F-22) with 6th-generation aircraft technology. Through this process, LMT is targeting ~80% of the capability of a next-gen aircraft at ~50% of the cost. We see this as a potentially compelling value proposition as customers prioritize higher-volume and lower-cost platforms. While exact NGAD platform unit pricing is unknown, each aircraft, per the Air Force, is expected to cost “multiple hundreds of millions” (the Congressional Budget Office previously estimated per unit costs as high as ~$300m), which is ~3x an F-35. We also note the F-35 has a significant installed base of over 1,150 aircraft.

Golden Dome = Golden Opportunity

The Trump administration appears to be moving out quickly on its Golden Dome concept. Such a system will likely require a range of sensors, interceptors and command and control elements. As a market leader in missile defense, we see LMT well-positioned for Golden Dome, particularly as the Pentagon looks to move fast with existing systems (RFI had a 30-day response deadline). LMT has offered >100 different capabilities in support of the Golden Dome effort, per management.

2025 Guide Reaffirmed

Management reiterated its 2025 outlook across the board, expecting revenue of ~$73.75-74.75bn (~4.5% y/y growth), EPS of $27.00-27.30, and FCF of ~$6.6bn-6.8bn. LMT’s guidance assumes a measure of tariff impact, though management expects to be able to mitigate any cost increases / cash timing pressures. We note cost-plus contracts allow defense companies to receive reimbursement from higher input costs, while some fixed-price contracts include escalators that offset price increases. Additionally, defense primes tend to mirror fixed price terms with their supply chains when entering into fixed price arrangement with the US government. We note LMT’s 2025 guidance also incorporates the direct sales / profit / cash impact from the NGAD loss, though management continues to work through any indirect impacts (e.g., redeploying classified workforce, potential write-downs, etc.).

Reiterate OW / PT of $575

We update our model to factor in 1Q25 results and updated management commentary. In 2025, we raise segment operating margin estimates ~10bps to 11.1% on higher full-year expected profits at Space and RMS, which drives full-year EPS to $27.30 from $27.15. We leave our outyear EPS estimates unchanged. Additionally, we raise 2025 FCF by ~1% to ~$6.73bn from ~$6.67bn. We now estimate a ~5% adj. FCF CAGR over the 2024-2027 timeframe after adjusting for anticipated pension contributions in 2026 and 2027. We estimated ~$6.75bn of FCF in 2026 and ~$7.12bn in 2027. We arrive at our price target of $575 by placing a ~20x multiple on base case 2026E adj. FCF/share of $29.25. Our ~20x multiple is a ~10% premium to our baseline Defense multiple, which we see warranted given continued robust demand for missiles / missile defense products and LMT’s balance sheet flexibility.

 

22 Apr 25. Lockheed Martin Reports First Quarter 2025 Financial Results

• Sales increased 4% to $18.0bn
• Net earnings of $1.7bn, or $7.28 per share
• Cash from operations of $1.4bn and free cash flow of $955m
• Returned $1.5bn of cash to shareholders through dividends and share repurchases
• Reaffirms 2025 financial outlook

Lockheed Martin Corporation [NYSE: LMT] today reported first quarter 2025 sales of $18.0bn, compared to $17.2bn in the first quarter of 2024. Net earnings in the first quarter of 2025 were $1. bn, or $7.28 per share, compared to $1.5bn, or $6.39 per share, in the first quarter of 2024. Cash from operations was $1.4bn in the first quarter of 2025, compared to $1.6bn in the first quarter of 2024. Free cash flow was $955m in the first quarter of 2025, compared to $1.3bn in the first quarter of 2024.

“The momentum we created last year continued into the first quarter of 2025, with sales growing 4% year-over-year and free cash flow generation of $955m. We continued investing in the business with over $850m of research and development and capital expenditures in the quarter, and returned $1bn to shareholders through dividends and share repurchases,” said Lockheed Martin Chairman, President and CEO Jim Taiclet. “These solid first quarter results reinforce confidence in our ability to achieve the full year 2025 financial guidance we laid out in January, demonstrating the resilience and adaptability of Lockheed Martin’s franchises amidst a highly dynamic geopolitical and technical environment. We are focused on operational excellence to drive the timely and efficient execution of our $173 bn backlog, which represents more than two years of sales,” continued Taiclet. “We remain committed to realizing our vision of digital and interoperable systems and are aligning our mission roadmaps to best support our customers’ rapidly evolving security needs, both domestic and global. This focus, along with Lockheed Martin’s track record of innovation and performance, continues to result in new awards, including the recent missiles contracts for Precision Strike Missiles, THAAD and JASSM/LRASM, as well as the Trident II D5 Life Extension, comprising up to $10 bn of future work.”

Summary Financial Results

Cash from operations in the first quarter of 2025 was $1.4bn with free cash flow of $955m compared to $1.6bn with $1.3bn in free cash flow in the first quarter of 2024. The decrease in cash from operations was primarily due to an increase in contract assets as a result of the timing of milestones, higher insurance costs, and timing of payments for employee related accruals. These items were partially offset by a decrease in accounts receivable due to the timing of billings and collections and an increase in accounts payable due to timing of supplier payments. The decrease in free cash flows was primarily due to the cash from operations drivers and higher software expenditures. uring the quarter ended March 30, 2025, the company paid cash dividends of $796m and repurchased 1.7m shares for $750m.

2025 Financial Outlook

The financial outlook for 2025 assumes the company’s programs are funded by and at levels consistent with the full year Continuing Appropriations and Extensions Act of 2025 signed by the President on March 15, 2025. However, the 2025 outlook does not include the evolving impacts of tariffs or related recoveries, the recent Next Generation Air Dominance announcement, or Executive Orders issued by the Administration. Additionally, it is the company’s practice not to incorporate adjustments into its financial outlook for proposed or potential acquisitions, divestitures, ventures, future gains or losses related to changes in valuations of the company’s net assets and liabilities for deferred compensation plans or early-stage company investments, pension risk transfer transactions or discretionary contributions, financing transactions, changes in law, or new accounting standards until such items have been consummated, enacted or adopted. Actual results may differ materially from those projected. For additional factors that may impact the company’s actual results, refer to the “Forward-Looking Statements” section in this news release.

Segment Results

The company 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. Consolidated net profit booking rate adjustments increased segment operating profit by approximately $480m in the quarter ended March 30, 2025, which includes $185m of adjustments resulting from favorable performance upon completion on certain commercial civil space programs at Space and a classified program at Aeronautics.

Consolidated net profit booking rate adjustments increased segment operating profit by approximately $195m in the quarter ended March 31, 2024, which included a $100m reach-forward loss recognized on a classified program at MFC.

Aeronautics 

Aeronautics’ sales during the quarter ended March 30, 2025 increased $212m, or 3%, compared to the same period in 2024. This increase was primarily driven by a $215m increase in sales from the F-35 program, resulting from higher volume on production contracts.

Aeronautics’ operating profit during the quarter ended March 30, 2025 increased $41m, or 6%, compared to the same period in 2024. This increase was attributable to two main factors: a $20m increase in profit booking rate adjustments and a $20 m increase from higher volume, as described above. The increase in profit booking rate adjustments was primarily due to an $80m adjustment resulting from favorable performance at completion on a classified program, partially offset by lower profit rate adjustments on C-130 programs.

Missiles and Fire Control

MFC’s sales during the quarter ended March 30, 2025 increased $380m, or 13%, compared to the same period in 2024. This increase was primarily driven by a $370m increase in sales from tactical and strike missile programs, resulting from production ramp-up on Joint Air-to-Surface Standoff Missile (JASSM), Long Range Anti-Ship Missile (LRASM), and precision fires programs.

MFC’s operating profit during the quarter ended March 30, 2025 increased $154m, or 50%, compared to the same period in 2024. This increase was attributable to two main factors: a $135m increase in profit booking rate adjustments and a $25 m increase from production ramp-up, as described above. The increase in profit booking rate adjustments was primarily due to a $100 m reach-forward loss for a classified program and an unfavorable profit adjustment on Hellfire recognized in the first quarter of 2024 that did not recur, partially offset by lower favorable profit adjustments on Patriot Advanced Capability-3 (PAC-3).

Rotary and Mission Systems

RMS’ sales during the quarter ended March 30, 2025 increased $240m, or 6%, compared to the same period in 2024. This increase was primarily driven by a $145m increase in sales from integrated warfare systems and sensors (IWSS) programs due to higher volume on the Canadian Surface Combatant (CSC) and radar programs; and a $125m increase from Sikorsky helicopter programs due to higher production volume on Black Hawk programs.

RMS’ operating profit during the quarter ended March 30, 2025 increased $91m, or 21%, compared to the same period in 2024. This increase was attributable to three main factors: a $45m increase in profit booking rate adjustments, a $25m increase from favorable contract mix and cost recoveries, and a $20m increase from higher volume, as described above. The increase in profit booking rate adjustments was primarily due to unfavorable profit adjustments on Seahawk programs in the first quarter of 2024 that did not recur. The increase in favorable contract mix and cost recoveries includes a $50m intellectual property license arrangement.

Space

Space’s sales during the quarter ended March 30, 2025 decreased $64m, or 2%, compared to the same period in 2024. This decrease was primarily attributable to lower sales of $155m on national security space programs due to program lifecycle on Next Generation Overhead Persistent Infrared (Next Gen OPIR) system and lower volume on Transport Layer programs. This decrease was partially offset by an increase of $75m primarily due to favorable performance at completion on certain commercial civil space programs.

Space’s operating profit during the quarter ended March 30, 2025 increased $54m, or 17%, compared to the same period in 2024. This increase was attributable to an $85m increase in profit booking rate adjustments partially offset by $20m of lower equity earnings driven by lower launch volume from the company’s investment in United Launch Alliance (ULA). The increase in profit booking rate adjustments was primarily due to favorable performance at completion on certain commercial civil space programs.

Total equity (losses)/earnings (ULA) represented approximately $(5)m, or (1)%, of Space’s operating profit during the quarter ended March 30, 2025, compared to approximately $15m, or 5% for the same period in 2024.

Income Taxes

The company’s effective income tax rate was 15.9% and 15.8% for the quarters ended March 30, 2025 and March 31, 2024. The rates for all periods benefited from research and development tax credits, tax deductions for foreign derived intangible income, dividends paid to the company’s defined contribution plans with an employee stock ownership plan feature and employee equity awards.

 

Northrop Grumman

Northrop Grumman Reports First Quarter 2025 Financial Results

• Net awards of $10.8bn; new record backlog of $92.8bn
• Sales of $9.5 bn • Diluted EPS of $3.32, including impact of B-21 LRIP loss provision of $2.74
• Repaid $1.5bn of long term debt and returned nearly $800m to shareholders through share repurchases and dividends
• Reaffirming 2025 guidance for sales and free cash flow

22 Apr 25. Northrop Grumman Corporation (NYSE: NOC) reported first quarter 2025 sales decreased 7 percent to $9.5bn, as compared with $10.1bn in the first quarter of 2024. First quarter 2025 sales reflect two fewer working days than the first quarter of 2024 and our previously disclosed wind-down of work on certain Space Systems programs. First quarter 2025 net earnings totaled $481m, or $3.32 per diluted share, as compared with $944m, or $6.32 per diluted share, in the first quarter of 2024. During the first quarter of 2025, we recognized a pre-tax loss of $477m ($397m after-tax or $2.74 per diluted share) across the five low-rate initial production (LRIP) options on the B-21 program at Aeronautics Systems. The loss largely relates to higher manufacturing costs primarily resulting from a process change made by the company to enable an accelerated production ramp, as well as increases in the projected cost and quantity of general procurement materials.

“Global demand for our products remains strong, which is reflected in our record first quarter backlog, and we are making significant progress on our key programs,” said Kathy Warden, chair, chief executive officer and president. “The Northrop Grumman team remains committed to driving innovation to meet our customers’ priorities, expanding our market presence and optimizing performance to deliver profitable, sustainable growth. Given this, we are reaffirming our sales and free cash flow guidance for the year.”

Consolidated Operating Results and Cash Flows

Sales

Aeronautics Systems $ 2,814 $ 3,044 (8%)

Defense Systems 1,805  1,737 4%

Mission Systems 2,807  2,659 6%

Space Systems 2,568  3,149 (18%)

Intersegment eliminations (526)  (456)

Total sales 9,468  10,133 (7%)

Operating (loss) income

Aeronautics Systems (183)  306 NM

Defense Systems 179  156 15%

Mission Systems 361  378 (4%)

Space Systems 283  330 (14%)

Intersegment eliminations (72)  (66)

Segment operating income1 568  1,104 (49%)

Segment operating margin rate1 6.0%  10.9% (490) bps

FAS/CAS operating adjustment 63  6 950%

Unallocated corporate expense:

Intangible asset amortization and PP&E step-up depreciation (21)  (25) (16%)

Other unallocated corporate expense (37)  (14) 164%

Unallocated corporate expense (58)  (39) 49%

Total operating income $ 573 $ 1,071 (46%)

Operating margin rate 6.1%  10.6% (450) bps

Interest expense (156)  (146) 7%

Non-operating FAS pension benefit 130  168 (23%)

Other, net 31  38 (18%)

Earnings before income taxes 578  1,131 (49%)

Federal and foreign income tax expense 97  187 (48%) Effective income tax rate 16.8%  16.5% 30 bps

Net earnings $ 481 $ 944 (49%) Diluted earnings per share 3.32  6.32 (47%)

Weighted-average diluted shares outstanding, in milions 144.9  149.3 (3%)

Net cash used in operating activities $ (1,565) $ (706) (122%)

Capital expenditures (256)  (270) (5%)

Free cash flow1 $ (1,821) $ (976) (87%)

Financial Results

Sales

First quarter 2025 sales decreased $665m, or 7 percent, driven by lower sales at Space Systems due, in part, to the wind-down of work on certain Space programs, as discussed in our segment operating results below, and lower sales at Aeronautics Systems. These decreases were partially offset by higher sales at Mission Systems and Defense Systems. Operating Income and Margin Rate First quarter 2025 operating income decreased $498m, or 46 percent, primarily due to a $477m loss provision on the B-21 program at Aeronautics Systems and lower operating income at Space Systems and Mission Systems, partially offset by higher operating income at Defense Systems and a $57m increase in the FAS/CAS operating adjustment. Operating margin rate declined to 6.1 percent from 10.6 percent primarily due to the B-21 loss provision and a lower operating margin rate at Mission Systems, partially offset by higher operating margin rates at Defense Systems and Space Systems and a $57 m increase in the FAS/CAS operating adjustment.

Segment Operating Income and Margin Rate

First quarter 2025 segment operating income decreased $536m, or 49 percent, primarily due to the $477m B-21 loss provision described above and lower operating income at Space Systems and Mission Systems, partially offset by higher operating income at Defense Systems. Segment operating margin rate1 decreased to 6.0 percent from 10.9 percent primarily due to the B-21 loss provision and a lower operating margin rate at Mission Systems, partially offset by higher operating margin rates at Defense Systems and Space Systems.

Federal and Foreign Income Taxes

The company’s first quarter 2025 effective tax rate (ETR) increased to 16.8 percent from 16.5 percent in the prior year period. The increase in our ETR was driven by interest expense on unrecognized tax benefits and excess tax benefits for employee share-based compensation, partially offset by research credits. Net Earnings First quarter 2025 net earnings decreased $463m, or 49 percent, primarily due to the B-21 loss provision described above as well as a $38m reduction in the non-operating FAS pension benefit and higher interest expense, partially offset by a $90m decrease in income tax expense.

Cash Flows

First quarter 2025 cash from operating activities decreased $859m, or 122 percent, primarily due to changes in trade working capital largely driven by a comparative increase in vendor payments as well as the timing of billings and collections. The net use of cash during the first quarter is consistent with the company’s historical timing of operating cash flows, which are generally more heavily weighted towards the second half of the year. First quarter 2025 free cash flow1 decreased $845m, or 87 percent, principally due to a decrease in net cash from operating activities. Awards and Backlog First quarter 2025 net awards totaled $10.8bn, and backlog totaled $92.8bn.

Significant first quarter new awards include $4.6bn for restricted programs (primarily at Space Systems, Aeronautics Systems and Mission Systems), $1.1bn for F-35 programs (primarily at Mission Systems and Aeronautics Systems), $0.5bn for the Integrated Battle Command System (IBCS) program, $0.3bn for Triton, and $0.3bn for E-2. 1Non-GAAP measure – see definitions at the end of this earnings release.

Segment Operating Results Effective July 1, 2024, the company realigned the Strategic Deterrent Systems (SDS) division, which includes the Sentinel program, from Space Systems to Defense Systems. Effective January 1, 2025, the company realigned the Strike and Surveillance Aircraft Solutions (SSAS) business unit from Defense Systems to Aeronautics Systems. These realignments are reflected in the financial information contained in this report.

AERONAUTICS

Sales

First quarter 2025 sales decreased $230m, or 8 percent, primarily due to lower sales on B-21 and other restricted programs, as well as a decrease in F-35 sustainment volume due, in part, to the timing of materials. Operating Income First quarter 2025 operating income decreased $489m and operating margin rate decreased to (6.5) percent primarily due to the previously described $477m loss provision on the LRIP phase of the B-21 program, inclusive of a $226 m unfavorable EAC adjustment on the first and second LRIP lots.

DEFENSE SYSTEMS

Sales

First quarter 2025 sales increased $68m, or 4 percent, primarily due to continued rampup on the Sentinel program and higher volume on certain military ammunition programs, partially offset by lower sales on the Stand-in Attack Weapon (SiAW) program. Operating Income First quarter 2025 operating income increased $23m, or 15 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 9.9 percent from 9.0 percent primarily due to higher net EAC adjustments.

MISSION SYSTEMS

Sales

First quarter 2025 sales increased $148m, or 6 percent, primarily due to higher sales on the Scalable Agile Beam Radar (SABR) program, ramp-up on electronic warfare self-protection and international ground-based radar programs, and higher volume on marine systems programs. These increases were partially offset by lower volume on restricted advanced microelectronics programs. Operating Income First quarter 2025 operating income decreased $17m, or 4 percent, due to a lower operating margin rate, which more than offset higher sales. Operating margin rate decreased to 12.9 percent from 14.2 percent, primarily due to investments made by the sector in connection with restricted business opportunities and lower volume on restricted advanced microelectronics programs, which more than offset higher net EAC adjustments.

SPACE SYSTEMS

Sales

First quarter 2025 sales decreased $581m, or 18 percent, primarily due to wind-down of work on the restricted space and Next Generation Interceptor (NGI) programs, which reduced sales by $228m, as well as decreases for Commercial Resupply Services (CRS) missions, Space Development Agency (SDA) satellite programs and other restricted space programs.

Operating Income

First quarter 2025 operating income decreased $47m, or 14 percent, due to lower sales, partially offset by a higher operating margin rate. Operating margin rate increased to 11.0 percent from 10.5 percent principally due to higher net EAC adjustments.

 

RTX

23 Apr 25.  RTX cautions $850m hit from Trump’s tariffs over 2025, shares fall. RTX on Tuesday cautioned that U.S. President Donald Trump’s tariffs could chip away $850 m from its 2025 profits, sending its shares down 8.5%, even as it beat expectations for quarterly results and reaffirmed its full-year forecasts. It arrived at the figure on assumptions that customers do not change buying habits, Canada, Mexico, steel and aluminum tariffs remain at 25%, China tariffs remain at 145% and global reciprocal tariffs remain at 10%. The aerospace and defense major has benefited from steady demand for parts and maintenance as airlines fly aging fleets amid jet production delays, even as broader market uncertainty grows due to Trump’s trade war and ongoing supply chain challenges.

“The current environment is clearly very dynamic, but our company is well positioned to perform operationally and our teams remain focused on executing on our commitments and delivering our robust backlog,” CEO Chris Calio said.

On an adjusted basis, it reported a first-quarter profit per share of $1.47, compared with analysts’ estimates of $1.35, according to data compiled by LSEG. (Source: Google/Reuters)

 

23 Apr 25. RTX Corp: Pullback Overdone; Upgrade to OW
We upgrade RTX to Overweight from Equal-weight as we see risk reward skew more positive after yesterday’s pullback. We expect RTX to participate in the upside from a potential $1trn US Defense budget and exports in the Raytheon Defense business.

Key takeaways

• We upgrade RTX to Overweight from Equal-weight.
• RTX does not have a particularly outsized impact from tariffs compared to the broader market as 54% of company revs are to the more insulated Defense industry.
• The stock is now trading at a 12% discount to S&P 500 NTM P/FCF vs. only a 2.7% discount pre-“Liberation Day”.
• Expect RTX to participate in the upside from a potential $1 trillion US Defense budget and exports in the Raytheon Defense business
• We incorporate 50% of RTX’s tariff impact to our estimates for 2025; reiterate PT of $135.

Upgrade RTX to Overweight from Equal-weight

We upgrade RTX to Overweight from Equal-weight as we see risk reward skew more positive after yesterday’s pullback. The stock largely underperformed the market (down 10% vs. the S&P 500 of up 2.5%) on concerns about the financial impact of tariffs. For context, RTX’s market cap was down $16bn on $850m of potential tariff costs (about $1bn in FCF impact), effectively capitalizing this cost at 16x P/FCF. The pullback is overdone, in our view. The stock is now trading at a 12% discount to S&P 500 NTM P/FCF vs. only a 2.7% discount pre-“Liberation Day”. RTX does not have a particularly outsized impact from tariffs compared to the broader market as 54% of company revenue is to the more insulated Defense industry. In the long-term, should the tariffs stay in place, we would expect RTX to fully offset higher costs as contracts roll off in the next 5 years. The duopolistic nature of Aerospace OEM and the oligopolistic nature of the Aerospace and Defense supply chain protects RTX’s market share.

Comparison with GE Aerospace

From our conversations with investors, there are concerns that RTX has more tariff risk than GE Aerospace (not covered by MS Research). GE Aerospace stock was up 6% as GE Aerospace expects to fully mitigate tariff costs by taking corporate action including temporary tariff pricing surcharges. We note that RTX’s approach is more conservative and did not factor in actions like tariff pricing surcharges that it could also implement. We recognize that Aerospace & Defense is a net exporter for the US. An industry exemption could alleviate pressure.

Downside and Upside Risks

Our Bear Case of $90 reflects lingering direct tariff costs as well as indirect tariff costs that further disrupts an already vulnerable aerospace supply chain. Higher costs on the Geared Turbofan (GTF) fix could pressure profitability. Our Bull Case of $175 reflects a roll-off of tariffs or exemption for the Aerospace & Defense sector. Visible and growing free cash flow provides multiple expansion closer to higher multiple peers as the company improves operating quality.

$1 Trillion Defense Budget and Exports

We expect RTX to participate in the upside from a potential $1 trillion US Defense budget and exports in the Raytheon Defense business. In the environment where missile defense is a US priority with the Golden Dome, RTX is particularly well positioned to provide solutions with its capability with the battle proven Patriot Missile Defense System as well as its partnership with Rafael on the Iron Dome. We recognize that the international export market is also an opportunity as allies increase capabilities in missile defense.

PT of $135

We reiterate our PT of $135. We reach our PT of $135 using 2026E FCF/share and applying a ~21x multiple. Our 21x P/FCF multiple is 2 turns below the low end of the range in which the stock traded prior to the announcement of the GTF contaminated metal issue of ~23x-25x NTM P/FCF. During this time, the stock traded at a median premium of ~14% to the S&P 500. Our estimated 21x P/FCF multiple is a ~9% discount to the current S&P 500 NTM P/FCF of ~23x. We see a 2x turn discount to the S&P 500 warranted at this time given uncertainty around the volatile macro/tariff backdrop.

Model Changes

We update our model to incorporate 1Q25 results and management commentary. We incorporate 50% of RTX’s tariff impact to our estimates for 2025. As a result, we lower our operating profit by ~$425mn, which brings margin to 12.6% from 13.1%. We lower our Adj. EPS estimate to $5.87 from $6.12. We lower our 2025E FCF estimate to $6.9bn from $7.4bn. We leave our estimates for 2026-2027 largely unchanged at this time as we continue to evaluate the volatile tariff environment.

2025 Outlook Reiterated; Excludes Potential Tariff Impact

RTX reiterated its 2025 outlook for sales of $83bn-$84bn, Adj. EPS of $6.00-$6.15, and FCF of ~$7.0bn-$7.5bn. Outlook is largely in line with consensus sales of ~$84.15bn, Adj. EPS of ~$6.10, and FCF of ~$7.2bn.

$850mn Potential Tariff Impact

While not embedded in its 2025 guidance, RTX estimates a $850mn direct impact to operating profit stemming from tariffs. Assuming tariffs are in place through the end of 2025, RTX sees a cost impact of ~$250mn from Canada and Mexico, ~$250mn from China, ~$300mn from reciprocal tariffs, and ~$50mn from steel and aluminum. Management expects to see the largest impact in 2H25 as inventory is liquidated. However, the associated cash impact is ~15-20% higher due to the timing of inventory consumption and duty drawback recovery and is expected to be evenly spread out over the remainder of 2025. At the segment level, RTX expects minimal impact at Raytheon (~$15mn), with the remainder of the impact split evenly across Collins and Pratt & Whitney (~$418mn). Management noted that these estimates are net of available mitigations and do not include secondary tariff related impacts.

Collins Aerospace

Sales at Collins Aerospace increased ~8% YoY. Commercial aftermarket sales increased ~13% YoY, driven by a 15% increase in parts and repair, an 18% increase in mods and upgrades, and a 1% increase in provisioning. Commercial OE sales increased 2% YoY, with higher A220, regional, and 787 volumes partially offset by lower 737 MAX volume. Defense sales increased ~10% YoY, largely due to higher volume across multiple programs and platforms. Operating profit increased ~17% YoY and margins expanded ~130bps, driven by drop through on higher commercial aftermarket and defense volume. Excluding the potential impact of tariffs, management continues to expect adjusted sales growth of LSD%, with operating profit growth of ~$500m-$600m YoY.

Pratt & Whitney

Sales at Pratt & Whitney increased ~14% YoY. Commercial aftermarket sales increased ~28% YoY, driven by higher volume and favorable mix across both large commercial engines and Pratt Canada. Commercial OE sales increased ~3% YoY, primarily driven by increased deliveries. Military sales were up ~4%, driven by increased engine deliveries on the tanker program and higher volume on the F135 engine core upgrade program. Operating profit increased ~37% and margins expanded ~130bps, as increased deliveries in large commercial engines were more than offset by drop-through on higher commercial aftermarket volume and favorable commercial aftermarket mix. Excluding the potential impact of tariffs, management continues to expect adjusted sales growth of HSD%, with operating profit growth of ~$325m-$400m YoY.

We continue to view it positively that there was no incremental news on the GTF. The estimated financial impact of the issue initially provided by management in September 2023 of $6-7bn ($3-3.5bn for RTX’s share) remained unchanged. RTX continues to focus on increasing PW1100 MRO output, which increased ~35% YoY and ~14% sequentially and remains on track for a >30% increase in 2025. Management also noted a 10% increase in isothermal forging output.

Raytheon

Sales at Raytheon decreased ~5% YoY as a result of the cybersecurity divestiture completed at the end of 1Q24. On an organic basis, Raytheon sales increased ~2%, driven by higher volume on land and air defense systems, including international Patriot and LTAMDS, which was partially offset by lower development program volume within air and space defense systems. Operating profit increased ~8% YoY and margins expanded ~120bps, primarily driven by favorable mix and $15mn of improved net productivity, partially offset by the impact from the cybersecurity divestiture. International demand continues to be a tailwind for Raytheon, with management noting a trend towards more international mix in sales and backlog. Excluding the potential impact of tariffs, management continues to expect adjusted sales growth of LSD%, with operating profit growth of ~$150mn-$225mn YoY.

 

22 Apr 25. RTX (NYSE: RTX) reports first quarter 2025 results

First quarter 2025

• Sales of $20.3bn, up 5 percent versus prior year, and up 8 percent organically* excluding divestitures
• GAAP EPS of $1.14, including $0.27 of acquisition accounting adjustments and $0.06 of restructuring and other net significant and/or non-recurring items
• Adjusted EPS* of $1.47, up 10 percent versus prior year
• Operating cash flow of $1.3bn; free cash flow* of $0.8bn
• Company backlog of $217bn, including $125 bn of commercial and $92 bn of defense
• Returned $0.9 bn of capital to shareowners

2025 full year outlook

• Adjusted sales* of $83.0 – $84.0 bn, including 4 to 6 percent organic growth*
• Adjusted EPS* of $6.00 – $6.15
• Free cash flow* of $7.0 – $7.5bn
• Outlook does not incorporate the impact of the recently enacted incremental U.S. and non-U.S. tariffs
• Management will provide additional details of potential tariff impacts on the Q1 2025 earnings call

“We are off to a strong start to 2025 with 8 percent organic sales growth* and 10 percent adjusted EPS growth*, including 120 basis points of segment margin expansion* in Q1,” said RTX President and CEO Chris Calio. “Organic growth was broad based and led by strength in commercial aftermarket, which was up 21 percent year-over-year driven by continued demand for our industry leading products and solutions.”

“The current environment is clearly very dynamic, but our company is well positioned to perform operationally and our teams remain focused on executing on our commitments and delivering our robust backlog.”

*Adjusted net sales (also referred to as adjusted sales), organic sales, adjusted operating profit (loss) and margin, adjusted segment operating profit (loss) and margin, adjusted net income, adjusted earnings per share (“EPS”), adjusted effective tax rate, and free cash flow are non-GAAP financial measures. When we provide our expectation for adjusted net sales (also referred to as adjusted sales), adjusted EPS and free cash flow on a forward-looking basis, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures (expected diluted EPS and expected cash flow from operations) is not available without unreasonable effort due to potentially high variability, complexity, and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results. See “Use and Definitions of Non-GAAP Financial Measures” below for information regarding non-GAAP financial measures.

First quarter 2025

RTX first quarter reported and adjusted sales were $20.3bn, up 5 percent over the prior year. GAAP EPS of $1.14 included $0.27 of acquisition accounting adjustments, and $0.06 of restructuring and other net significant and/or non-recurring items. Adjusted EPS* of $1.47 was up 10 percent versus the prior year.

The company reported net income attributable to common shareowners in the first quarter of $1.5bn which included $0.4bn of acquisition accounting adjustments and $0.1bn of restructuring and other net significant and/or non-recurring items. Adjusted net income* of $2.0bn was up 11 percent versus the prior year driven by growth in adjusted segment operating profit*, partially offset by the impact of a higher effective tax rate. Operating cash flow in the first quarter was $1.3bn. Capital expenditures were $0.5 n, resulting in free cash flow* of $0.8bn.

Summary Financial Results – Operations Attributable to Common Shareowners

Collins Aerospace

Collins Aerospace first quarter 2025 reported and adjusted sales of $7,217 m were up 8 percent versus the prior year. Excluding the impact of divestitures, the increase in sales* was driven by a 13 percent increase in commercial aftermarket, a 10 percent increase in defense, and a 2 percent increase in commercial OE. The increase in commercial aftermarket sales was driven by continued growth in commercial air traffic. The increase in defense sales was driven by higher volume across multiple programs and platforms, including multiple Command, Control, Communications, Cyber, and Intelligence programs, the Survivable Airborne Operations Center program, and F-35.

Collins Aerospace reported operating profit of $1,088 m was up 28 percent versus the prior year. On an adjusted basis, operating profit* of $1,227 m was up 17 percent versus the prior year. Operationally, the increase was driven by drop through on higher commercial aftermarket and defense volume. Reported operating profit in Q1 2024 included charges related to unfavorable purchase commitments and an impairment charge as a result of initiating alternative titanium sources, while reported operating profit in Q1 2025 included higher restructuring charges associated with cost transformation initiatives.

Pratt & Whitney

Pratt & Whitney first quarter reported and adjusted sales of $7,366m were up 14 percent versus the prior year. The increase was driven by a 28 percent increase in commercial aftermarket, a 4 percent increase in military, and a 3 percent increase in commercial OE. The increase in commercial aftermarket was driven by higher volume and favorable mix across both Large Commercial Engines and Pratt Canada, while the growth in commercial OE was driven by increased deliveries. The increase in military was driven by increased engine deliveries on the Tanker program and higher volume on the F135 Engine Core Upgrade program.

Pratt & Whitney reported operating profit of $580m was up 41 percent versus the prior year. Increased deliveries in Large Commercial Engines was more than offset by drop through on higher commercial aftermarket volume and favorable commercial aftermarket mix. Lower R&D expense more than offset higher SG&A expense. On an adjusted basis, operating profit* of $590 m was up 37 percent versus the prior year.

Raytheon

Raytheon first quarter reported and adjusted sales of $6,340m were down 5 percent versus the prior year. This decrease was driven by the impact from the divestiture of the Cybersecurity, Intelligence and Services business completed at the end of Q1 2024. Excluding the impact of the divestiture, sales were up 2 percent versus the prior year*. Operationally, the increase was driven by higher volume on land and air defense systems, including international Patriot and LTAMDS, which was partially offset by lower development program volume within air and space defense systems.

Raytheon reported operating profit of $678m was down 32 percent versus the prior year primarily due to the absence of the prior year $375m net gain on the sale of the Cybersecurity, Intelligence and Services business. On an adjusted basis, operating profit* of $678m was up 8 percent versus the prior year. The increase was driven primarily by favorable mix and improved net productivity, which was partially offset by the absence of profit from the Cybersecurity, Intelligence and Services business which was divested at the end of Q1 2024.

 

Textron

 

24 Apr 25. Textron Inc. (NYSE: TXT) today reported first quarter 2025 net income of $1.13 per share, as compared to $1.03 per share in the first quarter of 2024. Adjusted net income, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $1.28 per share for the first quarter of 2025, compared to $1.20 per share in the first quarter of 2024.

• EPS of $1.13; adjusted EPS of $1.28, up from $1.20 in the prior year
• Revenues of $3.3bn, up $171m from the prior year
• $215m returned to shareholders through share repurchases in the first quarter
• Powersports business sold, including the Arctic Cat brand and operations
• 2025 financial outlook reaffirmed

“In the quarter, we saw strong growth in both military and commercial product lines at Bell,” said Textron Chairman and CEO Scott C. Donnelly. “At Aviation, operations continued to improve as the factory progressed toward pre-strike performance levels while ramping production. At Textron Specialized Vehicles, we completed the sale of the Powersports business, including the Arctic Cat brand and its operations.”

Cash Flow

Net cash used by operating activities of the manufacturing group for the first quarter was $114m, compared to a cash use of $30m in last year’s first quarter. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, reflected a use of cash of $158m for the first quarter, compared to a cash use of $81m in last year’s first quarter.

In the quarter, Textron returned $215m to shareholders through share repurchases.

Divestiture

Within the Industrial segment, we have completed the previously announced strategic review of the Powersports product line. On April 23, 2025, we closed on the sale of the Powersports business, including the Arctic Cat brand and its operations.

Outlook

Textron reiterated its expectation for full-year 2025 GAAP earnings per share from continuing operations to be in the range of $5.19 to $5.39, or $6.00 to $6.20 on an adjusted basis, which is reconciled to GAAP in an attachment to this release.

The Company reiterated its expectation that net cash provided by operating activities of the manufacturing group will be between $1.2bn and $1.3bn and manufacturing cash flow before pension contributions, a non-GAAP measure, will be between $800m and $900m, with planned pension contributions of about $50m.

First Quarter Segment Results

Textron Aviation

Textron Aviation’s revenues were $1.2bn, up $24m from last year’s first quarter, largely reflecting higher aftermarket parts and services revenue of $27m.

Textron Aviation delivered 31 jets in the quarter, down from 36 in the first quarter of 2024, and 30 commercial turboprops, up from 20 in last year’s first quarter.

Segment profit was $127m in the first quarter, down $16m from a year ago, primarily reflecting the mix of aircraft sold, partially offset by higher aftermarket volume.

Textron Aviation backlog at the end of the first quarter was $7.9bn.

Bell

Bell revenues were $983m, up $256m from the first quarter of 2024. The revenue increase in the quarter was driven by higher military revenues of $154m, primarily due to higher volume from the U.S. Army’s FLRAA program and military sustainment programs, and higher commercial revenues of $102 m, primarily due to higher volume and mix.

Bell delivered 29 commercial helicopters in the quarter, up from 18 in last year’s first quarter.

Segment profit of $90m was up $10m from last year’s first quarter, largely due to the higher volume and mix of products and services described above.

Bell backlog at the end of the first quarter was $7.1bn.

Textron Systems

Textron Systems revenues were $296m, down $10m from last year’s first quarter, largely due to lower volume, which included the impact of the cancellation of the Shadow program in 2024, partially offset by higher volume for the Ship-to-Shore Connector program.

Segment profit of $40 m was up $2m, compared with the first quarter of 2024, primarily due to lower research and development costs, partially offset by lower volume.

Textron Systems’ backlog at the end of the first quarter was $2.3bn.

Industrial

Industrial revenues were $792m, down $100m from last year’s first quarter, largely due to lower volume and mix. Textron Specialized Vehicles’ revenues decreased $62 m, reflecting lower volume and mix, and Kautex revenues decreased $38m, largely due to lower volume.

Segment profit of $30m was essentially unchanged from the first quarter of 2024 as the impact of lower volume and mix was mostly offset by the benefit of cost reductions from restructuring activities.

Textron eAviation

Textron eAviation segment revenues were $7m in the first quarter of 2025, and segment loss was $17m, as compared with a segment loss of $18m in the first quarter of 2024.

Finance

Finance segment revenues were $16m, and profit was $10m in the first quarter of 2025, as compared to segment revenues of $15m and profit of $18m in the first quarter of 2024.