Executive Summary
Textron Inc. delivered a solid QQ3 2026 performance with revenue of $3.602 billion, up 5.11% year over year and a modest sequential decline of 3.07% QoQ. The gross profit of $654 million produced a gross margin of 18.16%, while operating income of $235 million yielded an operating margin of 6.52%. Net income reached $234 million, translating to a net margin of 6.50% and an EPS of $1.31. EBITDA stood at $443 million, or an EBITDA margin of approximately 12.3%. The year-over-year improvement in revenue was accompanied by a meaningful 32.93% rise in gross profit, signaling favorable mix or pricing dynamics, though near-term momentum appears to have cooled on a sequential basis as suggested by the QoQ revenue and gross profit declines.
The results underscore Textron’s diversified exposure across aerospace, defense, and industrial activities. A multi-segment mix, with ongoing demand in defense and aviation-related services, supports durable earnings visibility even as the company faces typical cyclicality in commercial aviation. The quarter benefited from disciplined cost management (SG&A of $257 million) and continued depreciation and interest expense of $97 million and $30 million, respectively. While explicit forward guidance was not provided in the disclosed data, the balance of indicators suggests Textron remains positioned to navigate near-term volatility while maintaining earnings resilience supported by a constructive defense backdrop and ongoing aftermarket/mission-support activity. Investors should monitor defense budget trajectories, aviation demand normalization, supply-chain dynamics, and potential margin progression as the company advances its cost-control initiatives and portfolio mix optimization.
Key Performance Indicators
QoQ: -12.64% | YoY:11.90%
Key Insights
Revenue: $3.602B; YoY +5.11%, QoQ -3.07%
Gross Profit: $654M; Gross Margin 18.16%; YoY +32.93%, QoQ -7.76%
Operating Income: $235M; Operating Margin 6.52%; YoY +11.90%, QoQ -12.64%
Net Income: $234M; Net Margin 6.50%; YoY +4.93%, QoQ -4.49%
EPS (Diluted): $1.31; YoY +10.08%, QoQ -3.68%
EBITDA: $443M; EBITDA Margin ~12.30%
Interest Expense: $30M; Depreciation & Amortization: $97M
Income Before Tax: $316M; Pre-Tax Margin ~8.77%
Income Tax Expense: $81M; Effective Tax Rate approximated at ~25.6...
Financial Highlights
Revenue: $3.602B; YoY +5.11%, QoQ -3.07%
Gross Profit: $654M; Gross Margin 18.16%; YoY +32.93%, QoQ -7.76%
Operating Income: $235M; Operating Margin 6.52%; YoY +11.90%, QoQ -12.64%
Net Income: $234M; Net Margin 6.50%; YoY +4.93%, QoQ -4.49%
EPS (Diluted): $1.31; YoY +10.08%, QoQ -3.68%
EBITDA: $443M; EBITDA Margin ~12.30%
Interest Expense: $30M; Depreciation & Amortization: $97M
Income Before Tax: $316M; Pre-Tax Margin ~8.77%
Income Tax Expense: $81M; Effective Tax Rate approximated at ~25.6%
Weighted Average Shares Outstanding: 179.15M; EPS Diluted: 1.31
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.60B |
5.11% |
-3.07% |
| Gross Profit |
654.00M |
32.93% |
-7.76% |
| Operating Income |
235.00M |
11.90% |
-12.64% |
| Net Income |
234.00M |
4.93% |
-4.49% |
| EPS |
1.31 |
10.08% |
-3.68% |
Management Commentary
transcriptHighlights could not be generated because no earnings call transcript data was provided in the input. Based on the financials, expected themes for an earnings call would include:
- Strategy and mix: Commentary on revenue mix between defense and commercial segments, and any pricing actions or backlog visibility that support earnings resilience.
- Operations and costs: Discussion of SG&A discipline, supply chain stabilization, and any cost-reduction initiatives that contributed to margin dynamics.
- Market conditions: Perspectives on defense budget momentum, commercial aviation demand recovery, and aftermarket/service growth drivers.
- Capital allocation: Updates on cash generation, returns to shareholders, and potential investments or tuck-in opportunities.
Note: For verbatim quotes and precise management viewpoints, provide the earnings call transcript or approved quotes.
Forward Guidance
No explicit forward guidance was disclosed in the provided data. Based on the macro environment and Textron’s mix, the following factors will likely influence the trajectory:
- Defense demand: A constructive trajectory in U.S. and allied defense budgets can support orders, backlog conversion, and stable revenue growth.
- Commercial aerospace: Industry recovery, supply-chain normalization, and aftermarket opportunities can bolster growth in Textron Aviation and related services, though the pace remains uncertain.
- Margin progression: Continued cost discipline and portfolio optimization could lift operating margins modestly if mix remains favorable and raw material costs stabilize.
- FX and inflation: Input costs and foreign exchange effects could affect profitability; hedging and pricing actions may mitigate some of these headwinds.
Overall, expect a mid-single-digit revenue trajectory with potential margin uplift if defense demand remains robust and the commercial cycle recovers more fully. Investors should monitor backlog execution, program awards, international growth opportunities, and ongoing SG&A discipline.