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.


 
 

 
Virgin Galactic photograph

NTSB concludes SpaceShipTwo flight test accident investigation

Virgin Galactic photograph WhiteKnightTwo and the first SpaceShipTwo during a captive carry test flight over the Mojave Desert. MOJAVE, Calif.–The National Transportation Safety Board has concluded the investigation of th...
 
 

Lockheed Martin, StemRad studying first-responder radiation shield for potential deep-space application

StemRad, Ltd. and Lockheed Martin have initiated a joint research and development effort to determine if StemRad’s radiation shielding technology ñ originally designed for first-responders ñ could help to keep astronauts safe on deep-space exploration missions. This collaboration is part of Lockheed Martin’s ongoing effort to establish international partnerships for human explorat...
 
 

General Dynamics to continue modernizing submarine tactical weapons systems

General Dynamics has received a $20 million contract modification from the U.S. Navy to continue modernizing the AN/BYG-1 Weapons Control System Technology Insertion and Advanced Processing Build software for U. S. Navy and Royal Australian Navy submarines. The AN/BYG-1 software analyzes and tracks submarine and surface-ship contact information, providing tactical, situational awareness for sub...
 

 

Boeing, Vietnam Airlines sign exclusive pilot training agreement

Boeing and Vietnam Airlines announced a five-year exclusive pilot-training agreement to support the Hanoi-based airline’s 787 Dreamliners. Under the agreement, Boeing Flight Services, a business unit of Boeing Commercial Aviation Services, will provide flight training for the airline’s new 787 Dreamliner fleet at Boeing’s Singapore training campus. Nearly 90 Vietnam Airlines p...
 
 
boeing-launch

Boeing WGS-7 satellite to provide military with 17 percent more bandwidth

Boeing’s seventh Wideband Global SATCOM satellite is now in orbit and will soon provide the U.S. and allied militaries with 17 percent more secure communications bandwidth than its predecessors thanks to a payload upgrade. ...
 
 

Boeing, Japanese partners formally sign agreement on 777X

Boeing and key Japanese partners July 23 signed a formal agreement for significant work on Boeing’s new 777X airplane. The agreement finalizes last year’s announcement by Boeing, Japan Aircraft Industries and Japan Aircraft Development Corporation of a Memorandum of Agreement to provide approximately 21 percent of the major airplane structure components for the 777X. The...
 




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=""> <s> <strike> <strong>