Aerospace and defense company Textron (NYSE:TXT) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 5.4% year on year to $3.72 billion. Its non-GAAP profit of $1.55 per share was 7.1% above analysts’ consensus estimates.
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Textron (TXT) Q2 CY2025 Highlights:
- Revenue: $3.72 billion vs analyst estimates of $3.63 billion (5.4% year-on-year growth, 2.4% beat)
- Adjusted EPS: $1.55 vs analyst estimates of $1.45 (7.1% beat)
- Adjusted EBITDA: $446 million vs analyst estimates of $417.8 million (12% margin, 6.8% beat)
- Management reiterated its full-year Adjusted EPS guidance of $6.10 at the midpoint
- Operating Margin: 9.3%, in line with the same quarter last year
- Free Cash Flow Margin: 8.5%, similar to the same quarter last year
- Market Capitalization: $15.74 billion
"In the quarter, we saw revenue growth in both our commercial aircraft and helicopter businesses, as well as in Bell's FLRAA program, now known as the MV-75," said Textron Chairman and CEO Scott C. Donnelly.
Company Overview
Listed on the NYSE in 1947, Textron (NYSE:TXT) provides products and services in the aerospace, defense, industrial, and finance sectors.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Textron’s 2.3% annualized revenue growth over the last five years was sluggish. This was below our standards and is a rough starting point for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Textron’s annualized revenue growth of 3.4% over the last two years is above its five-year trend, but we were still disappointed by the results. 
This quarter, Textron reported year-on-year revenue growth of 5.4%, and its $3.72 billion of revenue exceeded Wall Street’s estimates by 2.4%.
Looking ahead, sell-side analysts expect revenue to grow 6.8% over the next 12 months. While this projection indicates its newer products and services will spur better top-line performance, it is still below the sector average.
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Operating Margin
Textron has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.4%, higher than the broader industrials sector.
Looking at the trend in its profitability, Textron’s operating margin rose by 1 percentage points over the last five years, as its sales growth gave it operating leverage.
This quarter, Textron generated an operating margin profit margin of 9.3%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Textron’s EPS grew at a spectacular 17% compounded annual growth rate over the last five years, higher than its 2.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into Textron’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Textron’s operating margin was flat this quarter but expanded by 1 percentage points over the last five years. On top of that, its share count shrank by 20.7%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. 
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Textron, its two-year annual EPS growth of 9.6% was lower than its five-year trend. We hope its growth can accelerate in the future.
In Q2, Textron reported EPS at $1.55, up from $1.54 in the same quarter last year. This print beat analysts’ estimates by 7.1%. Over the next 12 months, Wall Street expects Textron’s full-year EPS of $5.57 to grow 16%.
Key Takeaways from Textron’s Q2 Results
We enjoyed seeing Textron beat analysts’ EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance slightly missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock remained flat at $87.20 immediately after reporting.
So should you invest in Textron right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.