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Textron warns on 3Q, 4Q
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September 26, 2001: 8:28 a.m. ET
Maker of Bell helicopters, Cessna aircraft sets 2,500 more job cuts
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NEW YORK (CNNfn) - Aerospace manufacturer Textron Inc. warned Wednesday that third- and fourth-quarter results will fall far short of Wall Street expectations, and said it will cut 2,500 jobs as it struggles with a slowing U.S. economy exacerbated by the Sept. 11 terrorist attacks.
For the third quarter, Textron, the maker of Bell Helicopters, Cessna aircraft and automotive parts, now anticipates a loss before one-time items of 25 cents a share. Analysts on average were anticipating a profit of 71 cents a share, according to earnings tracker First Call. Additionally, the company will incur a $275 after-tax charge to reduce goodwill and intangibles related to its OmniQuip business.
Textron also expects fourth-quarter earnings before items of between 40 cents and 60 cents a share. That's well below the $1.05 a share Wall Street consensus forecast, according to First Call.
The Providence, R.I.-based manufacturing conglomerate also said it is expanding its restructuring program, which will include slashing 2,500, of its 68,000 jobs, plant closures, curtailed production and other cost-cutting measures. The company anticipates a $125 million charge on top of a previously announced $200 million charge, to pay for the restructuring over the next six quarters.
The company expects the job cuts, which total 7,300, or 12 percent of the global workforce when combined with previous cuts, to be completed by the end of 2002. Textron expects the restructuring will save $120 million in 2001, $200 million in 2002 and $225 million in 2003, excluding its automotive trim business, which is being sold to Collins & Aikman Corp. (CKC: Research, Estimates) in a previously announced transaction.
"This situation demands immediate and forceful action," Textron CEO Lewis Campbell said, adding that he would resume direct responsibility for the company's businesses, a role he had as chief operating officer from 1992-1998.
The Sept. 11 attacks in which terrorists hijacked commercial aircraft and crashed them into the World Trade Center in New York and the Pentagon near Washington, D.C., leaving more than 6,000 missing or dead, have hurt its business.
Shipments at Cessna and Bell were suppressed in the wake of a four-day ban on all flying, forcing Textron to suspend flight tests and aircraft deliveries. Flights of most internationally-registered general aviation aircraft still are prohibited, the company said.
Separately, Textron announced a management shakeup making John Murphey chairman and CEO of the Bell Helicopter business, effective immediately. Murphey, 59, previously was president and chief operating officer of the business. He succeeds Terry Stinson and will report to Campbell.
Other management changes include the departure of John Janitz, the company's chief operating officer.
"Bell is facing a number of business challenges, and John and his team have the right focus on both strategy and execution to guide the company through a critical transition where cost controls will be a priority," Campbell said.
Textron (TXT: Research, Estimates) shares ended up 64 cents at $43 Tuesday. 
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Textron
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