Business

July 24, 2012

‘Tough’ second quarter expected for United Technologies

Future of defense spending, European debt and other problems seen as threats to United Tech 2Q

by Stephen Singer
Associated Press

United Technologies Corp. will release its second-quarter earnings results before the markets open July 26.

 

WHAT TO LOOK FOR: The conglomerate, based in Hartford, Conn., makes jet engines, elevators, heating and cooling equipment for homes and businesses and other aerospace and building systems. It’s in the process of selling several businesses to help finance its largest acquisition to date; $16.5 billion for aerospace supplier Goodrich Corp. in Charlotte, N.C.

Cowen and Co. analyst Cai von Rumohr said recently that more details about the Goodrich deal “could outweigh a well-advertised tough” second quarter.

United Technologies announced July 23 it’s selling its rocket propulsion business for $550 million. Industrial businesses of its Hamilton Sundstrand segment and a wind power company also are up for sale.

The company has warned of slowing economic growth in the United States, China and Europe, the impact of rising oil prices on airline customers and the debt crisis in Europe. Chief Financial Officer Greg Hayes told investor analysts last month that orders for Otis elevator in China are down about 20 percent since June 2011.

And he said India’s economy is “a little bit more uncertain” following the devaluation of the rupee in the last four years.

Von Rumohr said aerospace and defense contractors – United Technologies’ Pratt & Whitney sells military jet engines and Sikorsky Aircraft manufactures the Black Hawk – should produce “decent” second-quarter results. But Congress seems unlikely to resolve the threat of automatic defense spending cuts until late this year, he said, “making it a growing overhang for stocks.”

Edward Jones analyst Matt Collins said in a client note that a key risk to his “Buy” rating is a “muted rebound” in commercial aerospace and commercial construction markets. The conglomerate’s overseas operations also expose it to currency and geopolitical risks, he said.

 

WHY IT MATTERS: United Technologies’ markets span aerospace, defense and home and commercial real estate markets and the conglomerate’s reach extends into emerging markets in China and India, its results indicate how key segments of the domestic and international economies are performing.

 

WHAT’S EXPECTED: United Technologies is expected to post lower profit and revenue in the second quarter than last year’s comparable period. Analysts polled by FactSet expect United Technologies to earn $1.42 per share on revenue of $14.5 billion, compared with $1.45 per share and revenue of $15.08 billion in last year’s April-June period.




All of this week's top headlines to your email every Friday.


 
 

 

Headlines December 19, 2014

News: SpaceX’s attempt to land rocket on floating barge postponed - It’s set to be one of the most groundbreaking moments in humanity’s six decades of space exploration. Obama signs $1.1 trillion spending bill into law - President Obama signed the $1.1 trillion federal spending measure into law Dec. 16, officially ending any threat of a government...
 
 

News Briefs December 19, 2014

Trial set for ex-Navy engineer in military secrets case A former Navy civilian engineer is scheduled to stand trial next summer on charges of trying to steal aircraft carrier schematics. Media outlets report that 35-year-old Mostafa Awwad of Yorktown, Va., pleaded not guilty Dec. 17 to two counts of attempted exportation of defense articles and...
 
 
Army photograph by C. Todd Lopez

Army to launch cruise missile-detecting aerostat at Aberdeen Proving Ground

Army photograph by C. Todd Lopez The Army plans to launch an aerostat, part of the “Joint Land Attack Cruise Missile Defense Elevated Netted Sensor,” in late December 2014. The JLENS aerostat will be tethered to the...
 

 
Air Force photograph by SrA. Jordan Castelan

AF delivers Iraqi F-16s for training in US

Air Force photograph by SrA. Jordan Castelan Iraqi air force captain Hama conducts preflight inspections while inside a new to service Iraqi F-16 Fighting Falcon Dec. 17, 2014, located at the nearby Tucson International Airport...
 
 
Air Force photograph by SSgt. Derek VanHorn

Short-notice: A new way to exercise

Air Force photograph by SSgt. Derek VanHorn Airmen from Kadena Air Base, Japan, prepare for an aeromedical evacuation exercise on a KC-135 Stratotanker Dec. 5, 2014, at Misawa Air Base, Japan. The operation was executed in supp...
 
 
Lockheed Martin photograph by Andy Wolfe

Japan, Australia to provide F-35 maintenance sites in Pacific region

Lockheed Martin photograph by Andy Wolfe An F-35C Lightning II joint strike fighter carrier variant prepares to launch from the aircraft carrier USS Nimitz in the Pacific Ocean, Nov. 6, 2014. Japan and Australia will be sharing...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>