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 August 25, 2014

News: U.S. sends second carrier to Asia amid tensions with China - The Navy is sending a second aircraft carrier strike group to the Asia Pacific region amid new tensions with China over a dangerous aerial encounter between a Chinese interceptor and a Navy P-8 surveillance aircraft. SpaceX rocket explodes during test flight - A SpaceX rocket...
 
 

News Briefs August 25, 2014

China says U.S. plane intercept was professional China’s Defense Ministry has rejected U.S. accusations that a Chinese fighter jet conducted a dangerous intercept of a U.S. Navy surveillance aircraft off the coast of China in international airspace. The ministry issued a statement Aug. 23 attributed to spokesman Yang Yujun calling the U.S. accusations groundless. It...
 
 

Ukraine plans $3 billion boost to defense spending

KIEV, Ukraine – Ukraine’s president announced plans Aug. 24 to boost his country’s defense spending by an estimated 50 percent as government forces seek to overpower pro-Russian separatists in the east. President Petro Poroshenko pledged to spend an extra 40 billion hryvnia ($3 billion) by 2017 during a speech marking Ukraine’s independence from the Soviet...
 

 

NASA awards research facilities, engineering support services contract

NASA has awarded a contract for research facilities and engineering support services to InuTeq, LLC of Greenbelt, Maryland, in support of the Mission Information and Test Systems Directorate at NASA’s Armstrong Flight Research Center, Edwards, Calif. This cost-plus-award-fee contract covers a one-year base period beginning Nov. 1, 2014 and four one-year options, and is valued...
 
 

Navy Awards General Dynamics contract for LCS planning yard services

The U.S. Navy awarded General Dynamics Bath Iron Works a $100 million contract to provide planning yard services for the Littoral Combat Ship program. General Dynamics Bath Iron Works is a business unit of General Dynamics. Bath Iron Works, as the LCS Planning Yard, will provide maintenance and modernization support for all Navy LCS 1...
 
 
boeing-boc

Boeing, BOC Aviation announce order for 82 airplanes

  Boeing announced Aug. 25 an order by BOC Aviation for 50 737 MAX 8s, 30 Next-Generation 737-800s and two 777-300ERs (Extended Range). The order, valued at $8.8 billion at list prices, is the largest in BOC Aviation’...
 




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>