TFS Revenue Up, Profit Drops
TFS Revenue Up, Profit Drops
Jason Sandefur
Higher prices related to steel hike recoveries helped Textron Fastening Systems report a $3 million revenue increase to $457 million during the third quarter of 2005. TFS claimed a $346 million loss in Q3, which included a $341 million impairment charge triggered by parent company Textron’s decision to explore strategic alternatives with TFS. That review could include a sale of some or all of TFS. The Q3 loss was compounded by bad debt expense associated with a bankrupt account.
TFS quarterly results were released within days of the company’s announcement that it would close its $35 million fastener plant in Greenville, MS, during the first quarter of 2006, citing a slump in auto markets.
TFS revenue during the first nine months of 2005 grew 3.7% to $1.5 billion, but the company reported a $341 million loss compared with a $45 million profit during the first nine months of 2004.
Overall, Textron Inc. reported strong quarterly results, with revenues growing 12.3%, while profit gained 25% to $265 million, excluding the TFS impairment charge.
“Very strong performance at Bell, Cessna and Textron Financial overcame operating issues in the quarter at Fastening Systems and the challenges arising from Katrina,” stated CEO Lewis Campbell. “Also, most of our end markets continued to expand.” Some Textron facilities in Louisiana were damaged in Katrina’s wake.
Nine-month sales increased 19.3% to $8.84 billion, but net income slumped 64.5% to $85 million. Web: textronfasteningsystems.com �2005 FastenerNews.com
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