Textron working on a comeback

Question: What can I expect from my Textron Inc. stock? I am a longtime shareholder.

Answer: This manufacturer of Cessna planes and Bell helicopters is seeking to regain altitude after a nose dive in the recession.

The company’s Cessna unit is the leading maker of business jets, while Bell is a top supplier of commercial and military helicopters, including aircraft used in the wars in Iraq and Afghanistan. The firm is also known for unmanned aircraft and military communication systems.

But its business is affected by the vagaries of the economy and by changes in military spending. Revenue, which peaked at $14 billion in 2008, tumbled to $10.5 billion in each of the next two years. However, the manufacturer earned $86 million in 2010, reversing a $31-million loss in 2009.

Textron ended last year on an up note, and the firm enjoys a backlog of orders. Its finance unit is reducing its heavy debt load.

The hoped-for turnaround may already be largely reflected in Textron’s share price, which is up 14% this year after gaining 26% last year and 36% in 2009.

Fitch Ratings upgraded Textron’s debt to BB-plus — the highest “junk” rating — after the company swung to a fourth-quarter profit of $60 million from a year-earlier loss of $63 million.

Analyst ratings on Textron shares consist of three “strong buys,” five “buys” and seven “holds,” according to Thomson Reuters.

Andrew Leckey answers questions only through the column. Write him at [email protected].