Aerospace and defense company Textron (NYSE: TXT) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 15.6% year on year to $4.18 billion. The company expects the full year’s revenue to be around $15.5 billion, close to analysts’ estimates. Its non-GAAP profit of $1.73 per share was 1.5% above analysts’ consensus estimates.

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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

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Regrettably, Textron’s sales grew at a tepid 4.9% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Textron’s annualized revenue growth of 4% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

This quarter, Textron reported year-on-year revenue growth of 15.6%, and its $4.18 billion of revenue exceeded Wall Street’s estimates by 2.3%.

Looking ahead, sell-side analysts expect revenue to grow 4.3% over the next 12 months, similar to its two-year rate. This projection is underwhelming and suggests its newer products and services will not catalyze better top-line performance yet.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Textron’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 8.5% over the last five years. This profitability was higher than the broader industrials sector, showing it did a decent job managing its expenses.

Analyzing the trend in its profitability, Textron’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q4, Textron generated an operating margin profit margin of 9.1%, 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 an astounding 24.2% compounded annual growth rate over the last five years, higher than its 4.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Textron’s quality of earnings can give us a better understanding of its performance. A five-year view shows that Textron has repurchased its stock, shrinking its share count by 22.8%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

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 4.5% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q4, Textron reported adjusted EPS of $1.73, up from $1.34 in the same quarter last year. This print beat analysts’ estimates by 1.5%. Over the next 12 months, Wall Street expects Textron’s full-year EPS of $6.11 to grow 12.8%.

Key Takeaways from Textron’s Q4 Results

We enjoyed seeing Textron beat analysts’ revenue expectations this quarter. On the other hand, its full-year EPS guidance missed and its EBITDA fell slightly short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 4% to $90.50 immediately following the results.

Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).