Textron Seeks New Paths: Powersports Products in Focus of Restructuring

Shares of the US corporation Textron are experiencing losses after the company announced its intention to explore strategic alternatives for its powersports product line in the industrial segment. The background to this decision lies in the persistently weak consumer demand for these products. In an initial step, the Textron Specialized Vehicles division will suspend the production of its powersports products after completing planned production runs to fulfill existing customer commitments. This pause is expected to begin indefinitely in the first half of 2025. As part of these restructuring measures, Textron has increased the projected special pre-tax costs for its 2023 restructuring plan. These costs, initially estimated to be between 165 and 170 million US dollars, could now amount to between 190 and 205 million US dollars. This particularly reflects the costs for contract terminations related to the production pause. Additionally, Textron plans to take an inventory valuation charge of 30 to 40 million US dollars to write down the inventory of powersports products to its net realizable value. This measure is expected to result in a reduction of the adjusted earnings per share for 2024 by approximately 0.12 to 0.16 US dollars. During the announcement of its third-quarter results, Textron revised its outlook for the adjusted earnings per share from continuing operations for 2024 from the previous range of 6.20 to 6.40 US dollars to 5.40 to 5.60 US dollars. At the end of the third quarter, Textron had cash and equivalents amounting to 1.289 billion US dollars and inventories valued at 4.410 billion US dollars.