CORRECT: Textron Posts Surprise 3Q Profit

While Textron Inc.'s (TXT) third-quarter earnings fell 98%, the company posted a small, unexpected profit in the period, and said earnings will come in at the top end of its July forecast.

Shares traded recently at $20.00, up 8.9%, or $1.64, after the company, which makes Bell helicopters, Cessna jets and other products, said adjusted 2009 earnings per share will be at the high end of its predicted range of 33 cents to 63 cents. Analysts had expected a 6-cent per share loss for the year.

The company this year has headed off a financial crisis, liquidating some $3.5 billion of lending assets and exited some lending business. It has also restructured its industrial businesses and laid off thousands of workers, part of a planned 19% job reduction.

Scott Donnelly, newly elected chief executive, said Tuesday that Textron is poised to grow, but declined to make forecasts for 2010, telling analysts during a conference call that sales of Cessna business aircraft remain a wildcard for parent company's business outlook. The company will wait until late this year to craft "a much more credible view of what's going to happen in 2010," he said during the conference call. Other business units, including Bell Helicopter and golf businesses, are expected to grow next year. While Cessna sales remain sparse, and margins have fallen, the unit expects to return to profitability by the second half of 2010.

Used aircraft prices across the business aircraft industry not only have stabilized, but recently have risen slightly, Donnelly said, indicating that the sharp industry downturn is bottoming.

Textron posted a third-quarter profit of $4 million, or a penny a share, compared with $206 million, or 83 cents a share, a year earlier. Excluding restructuring charges, the latest quarter's earnings from continuing operations were 12 cents.

Revenue dropped 27% to $2.55 billion.

Cessna's profit plunged 87% as revenue fell 42%. During the first quarter, Textron sold the assets of CESCOM, Cessna's aircraft maintenance tracking service line.

Bell helicopter saw a 25% rise in profit as sales slid 11%. Textron Systems, the defense and intelligence segment, saw profit jump 25% as revenue slipped 11%.

-By Joan E. Solsman and Ann Keeton, Dow Jones Newswires; 312-750-4120; [e-mail]