Textron has set out plans to split off its Industrial division, marking a significant reshaping of the business as it leans more heavily into aerospace and defence. The company said the move would create a more focused platform built around Textron Aviation, Bell and Textron Systems, with chief executive Lisa Atherton saying the separation should be completed within 12 to 18 months and could proceed either through a sale or a tax-free spin-off.

The strategic shift comes on the back of a solid first quarter. Textron said revenue rose 12% to $3.7 billion, while adjusted earnings increased 13% to $1.45 a share. The company also repurchased about 1.8 million shares during the period, returning $168 million to investors, according to figures discussed on the earnings call and in the company’s results announcement.

Aviation was the strongest contributor to the quarter, with revenue up 22% as deliveries and aftermarket activity improved. Bell also made progress, helped by the ramp-up of the MV-75 Cheyenne programme, although that was partly offset by softer commercial performance. Textron Systems posted higher revenue too, supported by military programmes including Ship-to-Shore Connector and training work, while the Industrial arm delivered mixed results, with Kautex growing and other operations reflecting prior portfolio changes.

Atherton said the separation would give each business a clearer capital structure and better align it with its investor base. She argued that a pure-play defence and aviation company could invest more aggressively in priorities such as the U.S. Army’s MV-75 programme, while the industrial businesses would be able to pursue their own growth plans more independently. David Rosenberg, the chief financial officer, said the company expects any stranded costs to be manageable and believes a tax-free spin-off would be possible if that route is chosen.

Management also pointed to a strong start to the year in bookings, supply chain conditions that are gradually improving and a defence backdrop that remains supportive. Textron said the Industrial separation is now the centrepiece of its next phase, even as it continues to operate the businesses in their current form and work through the practical and tax considerations of the transaction.

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Source: Noah Wire Services