(Reuters) – Textron is exploring strategic alternatives for its Powersports product line due to persistent weak demand, the Cessna jet maker said on Wednesday.
The Powersports unit, which is part of the Textron Specialized Vehicles business under the Industrial segment, manufactures snowmobiles and recreational off-road vehicles, as well as parts and accessories for those vehicles, under the Arctic Cat brand.
“TSV has begun to pause production of its powersports products as management reviews strategic alternatives for the business,” Textron said in a filing.
The Providence, Rhode Island-based company announced a restructuring plan in November 2023 to reduce operating expenses.
This plan includes, among other measures, reducing the headcount at TSV, where the company anticipates that demand for certain powersports products will remain low.
As a result of the production pause and contract termination costs, Textron now expects total pretax special charges from the restructuring plan to range between $190 million and $205 million, up from the previously announced range of $165 million to $170 million.
The inventory valuation charge is expected to reduce adjusted profit for 2024 by approximately 12 cents to 16 cents per share. These charges will be recorded in the fourth quarter of 2024.
In October, Textron forecast full-year 2024 adjusted profit to range between $5.40 and $5.60 per share.
(This story has been corrected to fix the adjusted profit forecast to between $5.40 and $5.60 per share, not $1.40 and $1.49, in paragraph 8)
(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Tasim Zahid)
