Business

January 25, 2013

United Technologies fourth-quarter profit drops but higher aerospace sales lifts revenue

United Technologies Corp. posted a 26 percent drop in fourth-quarter net income from continuing operations Jan. 23 due to one-time items including restructuring costs and completing its $18.4 billion Goodrich acquisition.

But the Hartford, Conn., conglomerateís huge bet on the aerospace business is paying off, and it posted strong revenue gains for its jet engine maker Pratt & Whitney and UTC Aerospace Systems.

CEO Louis Chenevert called 2012 a ìtransformational yearî for United Technologies with the purchase of Goodrich and a $1.5 billion deal by Pratt & Whitney to buy out Rolls-Royce from a joint venture that makes engines for the Airbus A320.

ìWe closed the year better than we had anticipated,î he said.
United Technologiesí net income from continuing operations was $945 million, or $1.04 per share, meeting Wall Street expectations for the October-December quarter. When including the impact from discontinued operations, profit came to $2.06 billion.

United Technologies has been selling non-essential energy and industrial products businesses to help finance the Goodrich purchase.

Acquisitions helped lift revenue 14 percent to $16.44 billion, short of the $16.65 billion prediction of analysts polled by FactSet.

Chief Financial Officer Greg Hayes told investor analysts on a conference call that the Goodrich deal cut into profit for 2012 by 6 cents per share a little better than what we had expectedî ó due to lower financing and ìmore importantly, better underlying performance in the Goodrich business.

He was cautiously optimistic about economic growth, warning of uncertainty this year in Europe and the United States.

Still, he said the economy has shown ìsigns of stabilization, particularly in Europeî and a gradual recovery in the U.S., led by a rebounding housing market. Residential heating and cooling equipment and building security orders in North American markets jumped 20 percent in the quarter, but revenue fell to $4.15 billion, down 6 percent over last yearís fourth quarter.

Sales more than doubled at UTC Aerospace Systems and also rose at Pratt & Whitney and Sikorsky Aircraft, which manufactures helicopters.

Edward Jones analyst Christian Mayes said United Technologies will benefit from rising spare parts orders this year after airline customers spent 2012 building up inventories to conserve cash.

In addition, Otis, the largest elevator company in China, will benefit from rising home construction in the Asian nation, he said. United Technologies said orders in China for the quarter were up 17 percent after slumping 11 percent over the first three quarters of 2012.

Fourth-quarter profit at Otis was $644 million, down 9 percent. Jay Malave, vice president of investor relations, told analysts that cost-cutting and restructuring in 2012 will result in a return to rising profit this year.

United Technologies cut its 2013 profit guidance for Sikorsky due lower sales and profit and a charge. Malave told analysts that including a $157 million charge related to a delay in a helicopter program with the Canadian government, operating profit was down 7 percent and sales were 8 percent lower.

United Technologies said 2013 profit at Sikorsky is expected to be between $100 million and $150 million, down from previous guidance of $250 million to $300 million.

For the year, net income at United Technologies was $5.13 billion, including discontinued operations. Profit from continuing operations was $4.85 billion. Revenue came to $57.71 billion.

The conglomerateís Hamilton Sundstrand segment is a parts supplier for Boeingís now-grounded Dreamliner 787, but Hayes said it does not furnish the lithium-ion battery or battery charger at the center of the investigation. He would not comment except to say United Technologies does not believe the findings of the investigation will have a material impact on UTC.

The 787 fleet was grounded after a battery caught fire in Boston and another was overheated, forcing an emergency landing of an All Nippon Airways 787 in Japan.

United Technologies company maintained its 2013 guidance of profit between $5.85 and $6.15 per share on revenue of $64 billion to $65 billion. Thatís still roughly in line with what analysts expect: Earnings of $6.05 per share on revenue of $65.02 billion. AP




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


 
 

 

Headlines September 2, 2014

News: Debris yields clues that pilot never ejected - When investigators were finally able to safely enter the crash site of an F-15C “Eagle” fighter jet on the afternoon of Aug. 27, they made a grim discovery that concluded more than 30 hours of searching – the pilot never managed to eject from the aircraft.  ...
 
 

News Briefs September 2, 2014

Pentagon: Iraq operations cost $560 million so far U.S. military operations in Iraq, including airstrikes and surveillance flights, have cost about $560 million since mid-June, the Pentagon said Aug. 29. Rear Adm. John Kirby, the Pentagon press secretary, said the average daily cost has been $7.5 million. He said it began at a much lower...
 
 

Unmanned aircraft partnership reaches major milestone

A team of research students and staff from Warsaw University of Technology have successfully demonstrated the first phase of flight test and integration of unmanned aircraft platforms with an autonomous mission control system. The demonstration marks a significant milestone in a partnership between the university and Lockheed Martin that began earlier this year. This is...
 

 

Raytheon delivers first Block 2 Rolling Airframe Missiles to US Navy

Raytheon delivered the first Block 2 variant of its Rolling Airframe Missile system to the U.S. Navy as part of the company’s 2012 Low Rate Initial Production contract. RAM Block 2 is a significant performance upgrade featuring enhanced kinematics, an evolved radio frequency receiver, and an improved control system. “As today’s threats continue to evolve,...
 
 
Courtesy photograph

Two Vietnam War Soldiers, one from Civil War to receive Medal of Honor

U.S. Army graphic Retired Command Sgt. Maj. Bennie G. Adkins and former Spc. 4 Donald P. Sloat will receive the Medal of Honor for actions in Vietnam. The White House announced Aug. 26 that Retired Command Sgt. Maj. Bennie G. A...
 
 

Sparks fly as NASA pushes limits of 3-D printing technology

NASA has successfully tested the most complex rocket engine parts ever designed by the agency and printed with additive manufacturing, or 3-D printing, on a test stand at NASA’s Marshall Space Flight Center in Huntsville, Ala. NASA engineers pushed the limits of technology by designing a rocket engine injector – a highly complex part that...
 




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>