Textron (TXT) 26 Oct 232023 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Q3 2023 Textron Earnings Release Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Eric Salander, Vice President of Investor Relations. Please go ahead.

Thanks, Leah, and good morning, everyone.

like expectations we during I'd future be begin, and estimates our we to will mention discussing Before call today. are our also statements are forward-looking subject risk various These factors, detailed in today's SEC in and filings press release. to which

Scott we and our Officer. call Financial Chairman Connor, Textron's have the and Donnelly, On Chief today, CEO; Frank

third in billion, Our presentation found be of quarter can earnings million up million, million section quarter $XXX in up profit website. Revenues from quarter the in our quarter. last was $XXX the year's call the of were the $X.X Segment Investor $XX Relations XXXX. third

this per Manufacturing that, contributions, Adjusted income in from income share in During call $XXX turn share to measure, continuing share. measure operations, we flow continuing a per per quarter non-GAAP last in a XXXX. With quarter. year's million $X.XX over million third year's Scott. cash pension from of non-GAAP was I'll quarter, the $X.XX operations quarter to reported before $XXX $X.XX totaled compared of to the the compared third third

Eric, morning, good everyone. and Thanks,

quarter, year to and an with aircraft, at with the additional $XXX purchase the giving the Aviation Latitude strong and in next ending was agreement revenues third Bell NetJets flat The of jet grew were the and delivered turboprop quarter NetJets, relationship the billion. In at new Citation last up million, from products year's and in up At we XX a years. jets, with Systems, our XX of extending the resulted XX the while X,XXX quarter Industrial a in for demand year quarter revenues flat Textron third XXXX. solid including third our versus for year. prior third at quarter year the last XX quarter quarter, Aviation, a Longitude XX-plus fleet option XX% Aviation announced with commercial order across over increase strongest turboprops, the quarter. our Aviation and Backlog $X.X

the a As Aviation Citation service part which be expected also for is received newly announced NetJets quarter, Watch customer in into agreement, of Ascend, the enter this will in XXXX. Also the Fleet to [indiscernible] Aviation its King for during XX finalized to initial flight announced XX for also missions Air the be used favorability inspection. grand order for quarter. special order third caravans XXX

week, the strategy Citation front, also while new clean the sheet investing On upgrades, up product CJX new aircraft. announced wrapped Citation successful where our continuing X, X last show of a in portfolio Gen aircraft NBAA the we X Aviation our Gen existing modernizing product and MX

flat in the Moving in to reflecting quarter, higher Overall, Bell. [indiscernible] the largely continued program. revenues had on performance. margin revenues improved were ramp the the with military quarter Bell

Bell lower manufacturing commercial year's related shortages. XX supply reflected delivered chain in side, to On quarter. deliveries helicopters, from the XX last The third down disruptions

the and the a fleet, rock continuing order During higher quarter. saw success XXX the revenues trading we quarter, trainer to the world. Textron XXX aircraft Bell XX with as Systems, throughout margins pilot replace military a in their of

SUAS ships. aboard its build are quarter, total XXXX. Systems product Prototypes army. U.S. combat was Systems prototype also competitors X that systems towards Quad for final remaining design of X robotic additional During establishing the agreement, of an Tactical agreement C-based will the Future and review, to be X option with second system for initial the with the the competitors or Aerosonde was program. Onto System light the work to Army's Aerosan X Navy of vehicle baseline. critical includes systems expanded the X aero Aircraft unmanned awarded was delivered combat quarter, Also with operations during X Hybrid FTUAS Systems the which design Army expected in second competing the option Unmanned a award

volume market. in in auto Vehicle increased North the Within higher higher saw we year-over-year We we and to Industrial. strong Specialized volumes Vehicles, Kautex. to business. Moving both by in the Kautex, gulf continue driven demand American in driven Specialized by fleet recovery revenues saw quarter, see the the

Pipistrel Mesa systems continues aircraft prototype, with Air pilot of to eAviation. additional the motor momentum for battery first alpha systems. program. initial has in train aircraft Trainer XX Alpha to the and completed currently vital is ordering quarter, installation use unmanned electric development Also gain in Moving hybrid our the the [indiscernible] the undergoing cargo and integration

the vehicle of call enter the year. With by the expect I'll to ground testing We over Frank. the turn that, end to prototype phases

Thanks, Scott, and good morning, everyone.

an Aviation quarter, starting reflecting last $XX million, quarter, Textron of $XX Let's $XX contributed, million million and with higher a partially and favorable to to supply from ago, the $X.X due up profit inflation Segment year of Textron $XXX million each chain third up review inefficiencies. was pricing Aviation. Revenues pricing net unfavorable from segments performance million of million were mix from $XX higher by $XX volume and of largely impact of billion at and $XXX from a $XX million. million how of labor the higher volume third mix, favorable and related offset in year's of impact

segment the at quarter Backlog $X.X ended billion. the in

$XX revenues quarter, $X quarter, Moving of Segment third to the last of from offset $XX and development was favorable last third platform Segment in the research volume. million $X flat quarter segment of impact third Backlog up of ended and were to $XX was at a was million compared of Bell, Finance by due with in quarter due year's ended million were performance million recovery development quarter, previously and $XX mix billion. Industrial volume quarter, from due from revenues both a were and volume million, up of written customer $X of favorable of $XX $XX largely research million segment was segment revenues billion. At million, million lower lower lines $XX off of a costs. amounts revenues profit to revenues last primarily up third profit product million primarily primarily higher higher XXXX, pricing. from $X million. million, million to with profit $X.X year's quarter partially XXXX largely $XXX a one due and year's eAviation of reflecting this million the commercial with $XX $XX volume. the Segment by up of XXXX. Textron million and the largely offset from was of to impact higher in million an profit up quarter reflecting at million, Textron lower largely $XX were that third the related million. reflecting relationship. Systems, costs, loss $XXX last from quarter, $XX helicopter and were million the $XX were to $XX [indiscernible] quarter third year's million, volume mix segment from third military Backlog $XX largely favorable million segment $XXX million up performance

we've below remarks. in repurchased million. shares, Intangible expenses returning we quarter, were cash repurchased Year-to-date, postretirement returning $XX amortization segment pension million Moving and inventory the shares profit. income was XX.X of million approximately the X.X Net Corporate was components was to $XX non-service expense interest million. million. million $XX $XX approximately LIFO $XX $XXX shareholders. to share prepared $X.XX flow cash In to million asset with our provision wrap range year million, $X.XX. full of was in and to billion. That to of we concludes in $X.XX up continuing pension contributions expected We're to prior increasing $X $X.XX, a are manufacturing up our earnings guidance, of be year range also expect our million shareholders. To cash from million per full to $XXX before adjusted $XXX

questions. for we the So open line can

Our question comes with Instructions] Jefferies. Sheila first [Operator Kahyaoglu from

to gross of if can you price. Maybe backlog terms price, but X of points X on spot, pricing? net What talk we mix are of start NBAA, pricing in about at competitors booked points still seeing aviation your Aviation in or

it wants that much And your nitpick included I NetJets? everyone but know still XX%. was on How to of up backlog,

Sure, Sheila. at continue strong. to going so the I say that that to are into Aircraft -- do pricing. environment good I backlog price be look continues would

about we where So is feel marketplace. good the in that

for had the It's future the NetJets obviously, important that we've for contract aircrafts terms for long with business. deal extension the to X,XXX the a In NetJets, huge of of us. time additional is a look, of really the

customer very and with As us. we very The base. important NetJets you that's business have is to the know, partnership that very, diversified a

In terms of the wasn't it impact in material. the quarter,

firm the and we As up in delivery out, where time of and the is we is we're treat that the line the basically about looking working NetJets dates they time way aircraft. commit tails know, deposits, put those and the terms to year the you backlog NetJets all which a down with

backlog. we to So we additional and every sell add aircraft quarter, jets into the NetJets

range. one-to-one it's So generally that speaking, right around

something not thing again, a the important really So quarter. the the but materially the backlog for of it's future business, impacted huge in that

there, about then the if helpful. margins, that in another margin. Bell they going FLRAA talk that's posted No, on with [indiscernible]? particular XX% you R&D maybe now side and FARA And have on could you What's

think good performance a ago. Largely up category. spending that's certainly are FLRAA We line. now in, and the R&D tailwind on FLRAA, a programs program in look, funded ramps that our a own performance driven in helpful. numbers as So us, particularly Bell getting volume terms of in I the and helping is coming is for us the still deal the like money the fact were IRAD fully year by which of

get obviously, on, the as you this still week, great. do which we have we with engine So mentioned, did going is FARA, work

integration proceed Our start now team to get installed and running tests. will that preliminary

test waiting in sure, now to give was that. more And XXXX. But flight under the reduced test to you aircraft yes, spending, release release, strong. the then that R&D that And of FLRAA need flying we funded the for be get part IRAD ultimately, hopefully, as will for as army program. ground have We for is the performance

with to We on Barclays. David Strauss move

bit Scott, could supply give Aviation? little issues hit, a seen at performance think, on the just we've that I more maybe biggest color The chain there. you the was

can And or better give? you what engines? color getting things are is Or other it worse? So

a is Well, better, in year. tracks David, sort of attention would that trend of guess getting to the business say, yes, late I been it would trend give And of through declining course of from would better. a the that getting The it I standpoint, the PO the obviously, pays come lot say parts that, is look, is the I data. and color number data has

getting, just we been the and through like look big modestly has have But problem, right? that better at I wouldn't efficiencies effectivity any engine going a that's it's -- year. this. labor, we're it's So driving as still one They say

end get you you if missing can't the deliver towards As of -- that's parts still you're for aircraft, quarter, that the aircraft.

I And PO. is as still to parts from we to but PO, on of late say, an airplane. guess, important is context every are it late a getting often how part are many better So David, parts

challenge across types. that see to the number So of continuing we're aircraft

it the think like thing particular, fighting through. But it headwinds delivered in business. all quarter. obviously that, would that the we posting to still go I expansion customers to expect I going to good guess in the way despite get only it's the despite time, deliver we would will But like supply, better strong business some I growth to be aircraft to and we something in going the in to as through those all and quarter. I and more margin and mean, certainly to continue -- in is And have out but strong point would us we're see our have around we labor the we're that aircraft challenges the

growing headwinds, these drive very of continuing lot the business a despite well. is It's profitability. it's performance to growing think improved I and So

if And expect XXX us for more set of maybe, you should looking in we XXX could just Are kind what full to we Scott, range? level deliveries? year that Okay.

we're I -- not it's aircraft exact give to that probably to would to going expect. not we're but going neighborhood, numbers, going in David, Well, be

Next, Sachs. with Noah on we to Poponak move Goldman

you and demand amount a maybe uncertainty strong It's spend in the market. decent jet Aviation bookings on just the business another Scott, out number with of could a in pretty minute environment, there.

is love replacement is do of you. So to October? of it they Would from How have more macro what some in How saying? are a to color kind customers range just much just so of wide that your hear scenarios?

an The Look, in Noah. just continues I and strong. dollar order to book-to-bill of is absolute very a flow quarter. really strong demand activity mean, the environment be -- this is strong

And down. replacing in buying cases, are some So we are aircraft. capacity, slowing it they expanding seen fleet absolutely. the Absolutely. are aircraft? haven't just Or older People

rationale We behind demand, continue to strong the see of program. part obviously, [indiscernible] the

the they continue see to on demand As side. fractional very strong

jets certainly and been well. although outside So and the activity it's there's the the King strong And it's across some both while. obviously, what the U.S., Airs, really to It's Caravans very a continue the board. jets typical with strong in seeing SkyCourier order we've product U.S., good with across very for lines turboprop it's perform

So it be just environment. strong demand continues a to

in that the what Okay. unit down -- I trough. your think, is Aviation, just quite And a despite the look incremental, price. then from expanded point of the recognizing bit margin incremental on it sequentially and a the It's has for and little normally you healthy light year-over-year

note And anything we margin the there? look to for, the next year? -- finish for guess, do maybe So what to year I and into Aviation

look, But I in challenge going to showing with very without the being to margin it. are a late are the that still, and is strong think still Well, are amount those turnover, we'll fight impacted to that we're of everybody that to up industry continue our -- performance efficiencies parts healthy to and by think a continue It's issues, which through driven Noah. we're I labor see I margins. doubt, We performance, continue way just do going think experiencing. by

be year you through Can are you into Or still that be likely that battling in year? XXXX next numbers? to full

battle next into year. that Well, we're going think I to

quarter, like expect expect for will and I you is in that. delivery us quarter is it that will very typical and additional us traditionally a -- some a I So that quarter. delivery margin certainly conversion be would high give we'll fourth QX, see know, high

yet we're solid XXXX. we're But going should into strong in expect going to But next get think as on to people I again, mean, I we guidance to deliver just and continue seen the as obviously, think I we've go year. this fight to business XXXX, to margins. not growth

to we Doug Next, go Bernstein. Harned with

than When backlog looked the year, changed I been started year. you all? were -- of mix X:X a it's clearly, at kind how much wanted think talk has the And I to over topic. it And Could for the shifted your time? strong that. book-to-bill better continue thinking on you have the about you expectations like

is. expecting continue No, eventually, really for it customer plan, It's is we sort to I teams industry long. and base are what it kind I has think of hasn't. out it there to demand get can Look, not really of our much to exceed don't that did sales X:X. think -- I X:X, mean the But set obviously, our look, and that

have business. And than terrific year. obviously, if the So you the seen course it's as through X:X, that that's of greater the for note, we

the So as adjust we'll to kind is and continue plan markedly look production at of volumes and accordingly we mix go different. forward. But

seeing across lines. strong our said, across virtually of all still I the aircraft product seeing As jet types. demand, turbo it all different seeing we're we're We're

do the Courier some next it's having you of of some aircraft version there, an upgrade by Obviously, these market when it's out MX. which like having the our Sky helped CJX, by always stimulates helped a programs of next new version

out announced [indiscernible] have We there.

continue our demand would year market to in beginning the the even a be than have So kind of for product which we're versus the to is a obviously estimation drive to positive. there's to the of help at sure, end in of market. But lot X:X, stronger the invest always things expected, lines continues doing we that

delays chain. it I'm -- also I'm delivery a delays supply in this you is in the some deal Yes, have but with supply interested how positive, with -- because you

into are out at you scheduling continue? mean, this And huge say, to be far point. got issue do you to X:X some how if I Because You've were should at an this as ultimately, now? you start backlog. run here deliveries

it said, still make obviously we to down improving. continue comes adjustments. I to work chain line supply as the is a Yes. think our with Well, But trend part. to I to necessary look, And try

a for can't deliver I I few parts. missing So an missing an one aircraft part I can't deliver aircraft.

right time. So going rates of the But problem, adjust them, forecast future. way. Obviously, working and I all do rates kind into forward, going adjust still the think we to but to it it's a to that's we're our about our think a the on right, activity, those with that's is production suppliers as how real-time trending in going we're

we'll getting of out the and of additional make I some XXXX. factory. to can issues chain supply getting volume indicated So again I that's in earlier, versus to stronger where kind back -- and of partly resolved increased see as And demand, XXXX think partly expect deliveries we generate it's

Next go with to George the Shapiro line of Shapiro Research.

than Maybe benefits was increase I Was items I offset, this lower in tax increase got with this It rate. mainly The just mentioned. benefit worse finance, from eAviation I a you operational Frank. one have guidance, being mean, big in there got? and expected somewhat for I would quarter, that you what these EPS guess, a

as across I mean, seeing Bell. said. performance we're Scott strong we're No, seeing

solid so end performance guidance And higher to going come range, strong seeing least seeing, headwinds, margins Aviation, original seeing, be guided. the strong kind have in of frankly we're better I and in volumes of is margin overall a seeing Industrial strong think then segment. And the growth. would strong volume also We're some Systems. than we're and They'll we're at performance originally despite at Bell at year-over-year we of profit growth top and our the at

is can the -- aspects. certainly operational years thing. So ago. It always that's from a write-off those GFC are many from operational recovery an

good out the solid of businesses. performance a So

that Scott, quarter. And this we I would the maybe higher, on XXs deliveries call, Okay. in the think to saw last what closer from was comment be there a somewhere

bigger have quarter maybe thought see before? So we continue than what And ago. well? that going I bode does have might mean but supply than we'll strong fourth lot in year that would to for that's thought the months as being is less X all assume So chain. I a you next deliveries

expected, of a in fewer these for chain. still George, that challenges aircraft than sure, we we're that we issues is the supply say, that are result and and as originally delivering would I seeing

obviously, accommodate have have I will to Did the that aircraft that we'll have and the QX QX? to QX manufacturing we took We think some way QX forecasted just that. to our run from aircraft from we of we operations, year? units move Do Absolutely. this down moved Absolutely.

how much we we into George. where XXXX that Again, what into what mean will our is guide -- I all that's versus were that you of originally be, on add in get that we would incorporated planning when our we'll be guide aircraft XXXX, to

do we're give the to kind again, expect not see you all that. certainly would color number. the I over only of would still through a to I point and -- those that So is at working and XXXX numbers. But We're good expect growth you

So should for 'XX moving are sure, for 'XX be things it just be demand year from overall or a strong 'XX. to that us.

move Cowen. we Cai with TD on to Next, von Rumohr

be And talk any you maybe benefit we should XXX? do good Section next bit a we about see the -- of do out year? about pension And could you of IRS Frank, concerned quarter. get significant headwind clarification being latest little a

guidance had XXX, of On kind resulted the we in. following been what clarification the

to So a we standpoint. tax cash -- -- is no from change there

regard pension, around as I it that. not be to would a With go through we'll know, our process expect to year-end you headwind.

So from I problem into as kind headwind 'XX. have shouldn't move and pensions standpoint think a that we a of we with

Got it.

competitors but But looking good you've new the of mean then, got clean out while that what's done your demand of a years? Scott, anything. and strategically, announced sheet Obviously, you haven't a now. rest a have Okay. in a at And new of major your done thinking you've couple NBAA, I updates couple not

you next got think for some X new nice to years? start the that coming. But You've to something bigger do smaller X products you need

coming Denali, up just had are obviously, certification, we where now, very along nicely. we've Cai, mean, SkyCourier think I is right I Well, the in which that's We program. come

fabulous time, the sort Cai, for which be product that think big really the just Latitude/Longitude Certainly, so us. line is but That's a those has pretty making product those will major going XLS announce that to a kind home jet, decade period are that of where us. We and relatively program. on the kind aircraft the in for I think investments be I Ascend, in a of strategically, we is spectacular and some gone that shoes. there good of the light have we be to And in XL many the some will pretty family go a again, That upgrades of I for are mid down filling -- to and of now investments long fits run think, and I I Ascend did guess, years, are think, to us. enhancements Ascend super of mid-sized turned of really shape. Those is we aircraft. in turboprop to both think mid- going family. And I programs new where we as space those that before sort for be made have product good lived from back the a

that So through excited is great going and that's, here the again I be a that. And we're now. really to doing going right about think, Denali product well certification process

-- always stuff know, and on, any we that's on drawing look, We're new So always right there's up have actually. plans we're as you now, that that but for we're the don't ideas always announcements beyond full pretty stuff. board -- and working you

we Next, Research. Stallard Robert on with move Vertical to

there's of about have And you things? little your in take customers ability Scott, outlook yet the division, wondering, Aviation their for trying seen and get and concerned to rates economy a all and to higher the any more I starting defer that. concerns the was jets about again interest to some

or there's we there, really lately. of I'm it's It's Robert. mean, aware haven't, No, none I here a if even been been cancellation that -- here

way The thinking and could think are that. economy. that is XX-month because strong the the just now, in beyond what talking right is XX- I nature of of the people softness backlog. are you demand to a about out It's are be about, reality the deliveries look people

the of seen taking this economy what's -- happen going the So in not think don't shortsighted hey, any months I People of, you window, kind deliveries. XX aircraft. the we have to their in guys certainly are impacts next

they're out that way period order concern. And there. be problems any of seen might beyond again, perspective, from haven't that any an We

pool and on Industrial are side sort similarly things, you then what demand of Vehicles? of customers your at Kautex And from Specialized getting both the

in seeing strong things, side particular, very a has been Europe America, of has growing. been We've North been year. growing. Kautex The

we in -- we'll worried bit I everybody XXXX. expect XXXX. that in volume Obviously, growth the seen about nice we've was situation. see here UAW little are So increases in continue a

has morning, this was it see is Ford got tentative which a You agreement, great.

seen the haven't in impact we Toyotas will part serve before from hopefully, impact diversified get BMWs, We and a much country. OEMs resolved has of it and And kind lot us. We're of material North [indiscernible] that that yet. in America, the any the of the terms to Mercedes this pretty and southern particularly in the of

So as grow volume business nice the We've growth Anyway, at volume to the in vehicle seen does Kautex. well. continue

sure, a for and have strong, to 'XX, adjust accordingly. it's all, the golf attention basis. going consumer, consumer pay market, strong people if claims say the a it's high-end all you of it But strong market, but slowdown, sort So 'XX, the historical to commercial see close we as you're not in was even are most in market, still as on the as which it's quite staying

intersection that's us. business So things driving lot nice of -- think the the I what's is growth for all those a been and of

move Stanley. Morgan we Kristine to with on Next, Liwag

solid. flow Frank, turn low leverage pretty is less balance sheet is of at Free the and EBITDA. cash than Scott on pretty X

sort incremental an some your repurchase or environment share demand at strong. what's outsized shareholders the plan excess capital of the mentioned of You the I return existing of to transformative strength your stability for in guess either and your looking deal? is appetite business,

the what Well, do buyback. and we've the quarter, around returns continue on, share look, we've our we again in really did our we Kris, that been and what capital clearly, third in executing And quarter. is here to focus communicated here third focusing

of another our cash to turns. use flows, Obviously, good sheet the we'll was that share and on place. think continue balance We're is I it buyback. strong quarter agree. strong generating I we mean So a

good a and always but any wouldn't can we share for makes we that's obviously, ability we our we Obviously, terms program, an just eye versus and that. us, thing, contrast keeping deals continuing In successful. there's certainly that a ourselves sheet out that's we're something balance have if I that And have something keep couple which have of of an sense concluded out always like the acquisition very the that, there think out there things. we convince to where for opportunity, eye shareholders. And that has an been do for right been buyback that be

on the expand And industry, following Airbus AXXXneo, seen to Great. including that maybe addressable your your licensing up the in signed service MRO and GTF in engine appetite jets, a engines for we've what's XX-year ecosystem what Embraer join strength to Pratt business services agreement considering your market?

we with But Yes, there's promote business. our we engine them. don't making that. I of engine closely very, suppliers. I -- know with capability work details our there's Obviously, love all obviously -- we programs, which service those the suppliers for I'm very don't I I we're not mean, that -- mean and MRO sure great

business been service growing. has Our

would But we As you taken the service -- is used us. business a parts more any for MRO into direct make a and I I the know, those something that's any over sense is of around a parts think engine the suppliers. not all success make from last overhaul in getting lot us. that lot engine our for world. would than cared we've come and this mean and been decade, in it The in engine value do those do, big to about the aircraft the

left best that's to manage. to probably them So think I

Citi. Gursky Jason with to go we Next,

a in get all And bit for supply and settle level customer get right you they're the from your production XX talk And thinking be prior the willing put if time was level the wait to for would little were to about could of customers, to a assume should I less and what time right magic yet? how I Scott, like they chain pandemic. what you a to weren't just years than aside it for wand your issues today, of kind seem customers the out? What's there. wondering that long just moment you're months wave kind wait wait those hearing for if as that things right and all X-plus just the we about we that be? For Aviation

a now, like that's it's look, able there's the earlier good dates that that. There's delivery Jason. no we're no I promise than Well, what question know question, that to see us we customers them. mean have would answer way to mean I to true. to right have totally

a when I on not for adjustment of come as they it's in this could for think short aircraft wasn't a That time. going delivered that's I very they think something in that new historically, obviously, wanted decade a know, that period to get you obviously, -- or today. and true get is customers true certainly knew and so,

just could year about of you years or the and and a that industry. And a to X look an and want we've is you're people fleet able actually, a think something upgrade guys, do in kind couple some I transaction you're when accustomed your even done. current months that say, thinking right? thinking But geez, market no, that not like months" in inside backlogs are it's of of that to adjusting gone through going need the order quarter phase I realize who be a or to the think get to say, I X now of know about should "Well, of being if customers that to out, couple years. planning, what be challenging you about aircraft do that, So inside you're with a to thinking that come get in Customers your

time, customers time I point, earlier probably where promise them. So are like X I including think than this plan accustomed people to better but need because getting here, think the all know that answer sale an a we dates But -- the kind a and can kind them accordingly which on to a is mean, can of -- that's have year certainly that is because don't aircraft. I not buyers bad environment they stage aircraft, delivery think if helps couple fact their a own the everybody, what not we're of at of them this would long customers to years a line currently of for much accordingly you they because how plan frankly either about plan they more many at I market used a of the... it's really it's there's a of specific but those so for

Yes.

I the think what out now, lot If rates production a up we're we a way come is, X mean are production rate their the that figure see chain back we might supply into across kind would and years us once can work perspective. of over months, from to trying these what time? sweet industry through, spot XX of how is issues much

we're I better all to trying think what it's understand.

That for math is too sophisticated me.

product term. an any and based that bit easier new on term Can margin on whether for development there's margin business Maybe in opportunity longer little the you over over opportunity about on that the one offerings the working product margins Industrial. talk and structural then in you're a business longer today? the things that Just

generates margin. the margin cash. be back is have business. generates capacity Kautex still good the we a volumes I still of a there. single-digit mean, to mean up I in that. opportunity. auto a got we're, to obviously have But get high and margin. think world, we you're good It mean, should this I obviously, around now, do it's business lot good auto It of look, some trying I No, right

in what's business. had true utilization the more improvement And vehicle utilization, across efficient this capacity of product that some better those margin helpful. be We've of So the most be lines. would strong driving is year. The that's part demand obviously of of same

are them still the from post-COVID. some of recovering of Some

still lot of of aviation, that. -- -- fair challenges a we have and about through we're factories that's still that struggling manage talk kinds a labor supplier and as same are of with way bit we inefficiencies them of in the our some of Some in those

future. So still of think margins I in upside there's some terms in do the

move to Walton Wolfe Myles Research. Next, with on

on it's was agreement. not I lead the Scott, in wanting NetJets to off I And backlog. realize

years a confirm, do potentially carton on But from put probably in do in market, to the very backdrop? wonder, to I that a deliver this imagine and just in does prices? of maybe fold you horse. those agree upon guardrails do how more sign little a inflationary little XX And 'XX? just sale bit pre-inflationary the you you So straightforward or when per in constraints to realized up place volatile a How start this in, maybe. I X,XXX jets bit that's a is

in all want I pricing. of look, details So factor how go with we've but the to into always worked gory [indiscernible] been NetJets work market a of probably the we consideration there's that arrangement, with -- takes always in

XX-year that. industry. mean price in mean that's something thing. I could not the fixed nobody do it's I a So

this of have equitable they're very frankly, that aircraft are think there's you market out a have do selling really to adjustments I into fair again, pricing So to with because, marketplace. that deal made that's, NetJets. mean

these wholesaling about, business. and So spread have for covering you aircraft guess, sales their think a NetJets we to I costs of their and they a running then almost right -- and

So that's this a scheme is adjustment there into incorporated market thing.

down and sit to years trying what is nobody from is XX pricing imagine now. So

of And it through 'XX? then last one a in terms initiation is with the of contract, the deliveries the 'XX start running

right. it's add-on, I out. we -- are obviously, I we every we're what's and agreement and about year that So that's it mean, Yes, that think up the true of a sit extends again, an sort down have, already deliveries quarter right?

think old it's agreement, looked many I of if but -- new frame. the So yes, aircraft left versus were phasing at of agreement how time kind 'XX you kind on 'XX, the

tax have level at interest only rate and just given quarter And then, up, the we for clean you to year the point, us on this can set Frank, left?

little balances original also expense a guided, given with, cash our what's is in going come guided had mean, frankly, investment bit than our is better originally guidance. interest to probably our on a Yes. going little maybe just than better going had we and than X is to I point in better be tax we

Next, we move on Baird. to Arment Peter with

Scott USA of efforts. a Scott, about that really and to feeling down Frank, going are How of modernization tone obviously results. be the there the you the bullish performance forward? there nice really, was around just continues lot and the good, visibility business a Systems, on kind of

around of some we're good here important these just obviously, to strong for -- doing driven things Army, very select the sentinel RCV of of The sort growth in for program, they're very Peter, working the starting that on continues a new place. nice kind FUS we're the with I some of IRAD munition the partners are in grow systems, of investments this time the been in by long very with we've nicely. We know, down one program Grumman well. had a a had the roost. program select in come Northrop which Marine the to to mean you which things program think down the quarter. quarter like with decade-long as ARV that are I We The XMXXX, Army. Corps. That's with a lot

the and I or think opportunities performing this strong. The is business do are don't are mode, We've got So that growth business well. you back into know. there margins I all several have of material, out we additional a win not, them

couple close over next of opportunities that we I probably years. X the mean, have we'll here X significant pretty But or

we've well. pretty They're well. I are growth So opportunities delivering of think in I the been on the business pipeline. very lot they've existing think -- significant got clearly is their a that programs And executing

quick do in Frank, a Appreciate services what that quarter? -- on just then was for one color. have the growth And Aviation you the

the Yes, was and X%, XX% quarter. it was aftermarket of revenue for

Epstein to Bank America. we of Next, with Ron go

well. did business Industrials The

of intimated the how you're I quickly in a bigger So Is towards do that think of greater past, which kind maybe mean thinking Industrials than how question more that to about that, my or the not? Scott, Textron, direct it In or we context it's be about still business this. seems the think is the core. I you've company? evolving A&D

is industrial and generate how it. good looking improvements and performance now cash. strong about good we're That's way growth the mean think at providing right us I we Ron,

So is Is guess it core? is it I it not -- core? so

can We've performance. can the performing how make capital our Look, that's perform. for we thing M&A certainly never is are we we and they be think to places certainly kind I size shareholders. we we get that Ron, never defined make generate at certainly, businesses shareholders world of in opposed probably activity that additionally noncore. portfolio. additional Defense Aerospace the in what drive when smart would that for businesses, these the of look have or returns the extent M&A Those Industrial would as good we to and That's we can organic have the about view the we And our growth or core there's as business. But I should would investments do said add that. company, in thinking that increase the is and sure well best said,

go you focused A on Are like terms Yes. of now? Fair mentioned. out there M&A then or Are front in there like it the A&D. want agnostic? more directions enough. should... And right D that there opportunity? What's you focused Are or to you How

think, don't Aviation agnostic. us focus company. our grow Obviously, expanding Pivotal footprint. or Again, our a some we has the to a in that's the there's us our future nice business. be, think at additional largely opportunities look We've done help services in in given deal, the some that real times, here probably small some of there. There material could did future out Yes, in around I what Obviously, to opportunities know. be acquisition in of A&D for the turned recent not. I some terms deals of great that's most which acquisition capability M&As said, We massive as I in space. we any But for

As come look at things so keep come Rob, there's you know, kind And an pike. the that eye along only you deals down often, so of out.

to sense. think something would makes has for doing, we've do we'll is It what it our but sense, and to will that to shareholders, makes certainly good be deal, and continue We deal. fairly And a obviously financially that. material to participate a we that's we that been something the in if willing do -- great be that. we'll So have be capacity

Skibitski Our Pete with Olympic next is question Global. from

to deal? take question we obligated of Just to so, aircraft is Scott, under and the bit. maybe they're question of year compare follow NetJets if each little if up this a details into minimum number to there want get a can the does deal? But Myles' And is that prior on the deal see that how my gory main

down don't. aircraft. selling that's up. Those that and every a is sit they're firming NetJets us they X-year what and strong at out now, works in shares. with relationship but year the this pipeline a the window. No, time. robust in quarter, to like, sales And which aircraft activity way out think by roughly is that very our going those what every the looks friends looks deliver mean, where is fabulous I Look, market they mean, selling their and given day like, looking we're real that guys, right the I market are way, out I And

So market when selling. they're is strong, the

to and a to thing expect We number down. grow. to continue that slowdown, expect come If was there see we that

total that alignment around a So end it's market. XXX%

ever high think I Okay. get the about the about And this be year. XXX mean, -- if think on XX% how aircraft would a deliveries contemplating do more high you end that your end year of How of do you you average, to could than deal?

in guess, Well, what to if side say robust robust based I the -- I right? be side. that be is to market and on end would mean I if going but that the robust, the is going again, all whole that would that's to the it's aircraft end continues fractional like the market on be market, I also

it growing, So the see not XXXX number. output locked into you overall production is to expect to have in where

follow-up we David have a Strauss from Barclays. with And

FLRAA. on specifically ask to wanted Just

thought? annual I Where I better think have if do have of you run with guys are we to something fully QX? talked rate $XXX $XXX And getting ramped to think, FLRAA. did than in on margin kind holding Bell that million rate had certainly to that up, not, about revenue you million the --

partners 'XX certainly, lot going I would through that say up. It engineering at getting to rate contract. yet, suppliers No, a our lot I we're board the clip. as David. of key But 'XX. there's good those a obviously, ramped I ramped mean, our is and But will not grow award to a say of get on it. is the to we the pretty that also resources, from contract all wouldn't go to took time happening guys impact of that ramping I of ramp up mean lot original a margin internal to well. a here on is getting activity some

into year heads, So and this that's as our you particularly rest there's through kind pass-through on of ramp to also a the grow the you will, inside partners of Bell there's but well. if the you XXXX, of program as lot go the as

but it, on if side. apologize do How missed helicopter commercial I already supply the and this, the I And touched called may you've those chain out that have issues you on supply prior of to on you're think Bell the highlighted kind really you hadn't Aviation today. to on compare chain what seeing I a the side? as or challenge commercial side jet

it's Yes, similar mean very similar very issues. David. it's I -- they're issue,

Rumohr from have with we Cai follow-up von And TD Cowen. a

Yes.

of what's down like, deliveries the the Because there? XX% give guidance the Commercial. your assumes to down big kind could step-up And where looks to Bell fourth about and color going be what some talked maybe also margins effort in color demand FLRAA your original terms coming of you And quarter? like a very ramped? on we hit some look it's margins in were be. us So that like and tough Maybe should as had at

given be, the a color certainly Yes, the whole I'm the it of we have be side, end on of through guided. will of expect additional top we originally not over lot the to that margin sure what I Cai, the that year course it performance

strong year. But volume. a the very is are lower specific fairly but I relatively our speaking, around which it numbers and appreciate and the that, We think very like looks unit dollar still ramp. a a couple finish had So I XXX, big significant, Bell product, we will certainly a high-volume a feel of issues out that per

of So challenge, units a lot of those terms of is around lot the the numbers XXX. the a QX frankly, miss in in and

a to overall impact them number But obviously, them big have very on to material out. we want helicopters to out. of those Bell. us at won't get a get would light miss So the like Customers the performance

gentlemen, the does conference. conclude portion today's and ladies Q&A of And that

replay of Time Eastern XXXX digitized the be access to like will October a.m. midnight. XX would through it call, available today after XX, you at If this

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