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By Scott Malone
BOSTON, June 13 (Reuters) - Diversified U.S. manufacturer Textron Inc (TXT.N) on Friday lowered the high end of its second-quarter profit forecast, citing worse-than-expected performance at its finance arm, sending its stock down 5 percent in after-hours trading.
The world’s largest maker of corporate jets said it now expects second-quarter profit from continuing operations to come in the range of 93 cents to 98 cents per share. Previously it had forecast profit of 90 cents to $1 per share.
It said that loan-loss provisions at its finance arm would come to about $20 million in the quarter and that it would take a pretax charge of about $10 million related to a U.S. tax ruling.
Textron, which also makes products ranging from Bell helicopters to EZ-GO golf carts, maintained its full-year profit forecast of $3.80 to $4 per share, citing strong performances at its Cessna, Bell and military vehicle units.
“Despite further softening in our commercial finance business, 2008 is shaping up to be another very good year for Textron,” said Lewis Campbell, chairman and chief executive of the Providence, Rhode Island-based company.
Analysts, on average, forecast second-quarter profit of 98 cents per share and full-year earnings of $3.98 per share.
The company disclosed the news after the close of trading. Its shares fell $2.93, or 5 percent, to $55.25 in after-hours trade, down from a $58.18 close on the New York Stock Exchange
The global economy for the past year has been rocked by a credit crunch set off by troubles in the U.S. subprime lending industry, which made home loans to less-creditworthy borrowers.
In April, General Electric Co (GE.N) rocked financial markets with a stunning drop in quarterly profit that it blamed on poor results at its finance arm.
Textron’s financial arm last year accounted for about 10 percent of its profit.
Prior to Friday’s post-market fall, Textron shares were down 18 percent for the year, a sharper drop than the 11 percent slide of the Standard & Poor’s capital goods industry group index .GSPIC. (Editing by Gary Hill)