Textron Considers Alternatives for Powersports Division

(Reuters) – Textron (NYSE:TXT) is exploring strategic alternatives for its Powersports product line due to persistent weak demand, as announced by the Cessna jet maker on Wednesday.

The Powersports unit, part of Textron Specialized Vehicles under the Industrial segment, produces snowmobiles and recreational off-road vehicles, as well as parts and accessories for these vehicles, marketed under the Arctic Cat brand.

"TSV has begun to pause production of its powersports products as management reviews strategic alternatives for the business," Textron stated in its filing.

Based in Providence, Rhode Island, Textron had previously announced a restructuring plan in November 2023 aimed at reducing operating expenses. This plan involves several measures, including a reduction in headcount at TSV, as the company anticipates continued low demand for certain powersports products.

Due to the production halt and contract termination costs, Textron now expects total pretax special charges from the restructuring plan to range between $190 million and $205 million, increased from the earlier estimate of $165 million to $170 million.

The inventory valuation charge is projected to reduce adjusted profit for 2024 by approximately 12 cents to 16 cents per share. These charges are scheduled to be recorded in the fourth quarter of 2024.

In October, Textron forecasted full-year 2024 adjusted profit to range between $5.40 and $5.60 per share.

(This story has been corrected to reflect that the adjusted profit forecast is between $5.40 and $5.60 per share, not $1.40 and $1.49, as stated in paragraph 8.)