Textron plans to sell fluid and power unit

Textron Inc., a diversified manufacturer headquartered in Providence, said today that it had reached a deal to sell its fluid and power unit to UK-based Clyde Blowers Ltd for $526 million in cash.

The terms of the agreement also call for Textron to receive six-year notes worth up to $78 million and for Clyde to assume about $41 million of employee-benefit liabilities.

Textron, the world's largest maker of corporate jets, said it expected the sale to close by the end of the year and generate an after-tax gain of about $85 million.

The company will begin treating the fluid and power unit as a discontinued operation, which it said would reduce full-year profit from continuing operations by about 15 cents a share. Analysts look for earnings of $3.96 per share for 2008, according to Reuters Estimates.

Textron said it expected the fluid and power business, part of its industrial segment, to generate about $675 million in revenue this year. Wall Street had looked for total corporate revenue of $15.27 billion.

The company, which makes Cessna corporate jets, Bell helicopters, and EZ-GO golf carts, said it expected after-tax cash proceeds at closing to come to about $350 million. It plans to use about half that amount to buy back common stock. (Reuters)