Textron shares rose about 13% on Thursday after its Q3 results beat expectations: non-GAAP earnings of $1.76 per share versus the $1.43 estimate, with sales of $3.8 billion in line with forecasts. Under GAAP, EPS was $1.56, up 19% from a year earlier, while revenue grew 4%, led by Textron Systems (up 16%) and commercial aviation (up 14%), with Bell down 9%. Free cash flow reached $410 million, up 51% year over year. Textron raised its full-year guidance to GAAP EPS of $5.64 to $5.74 and free cash flow of $800 million to $900 million. With a $13.5 billion market cap, the author considers the roughly 15.9x price-to-free-cash-flow ratio a little expensive against analyst forecasts of under 11% annual earnings growth over five years.
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