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.


 
 

 

Northrop, Navy celebrate legacy of EA-6B Prowler

Northrop Grumman photograph by Edgar Mills The U.S. Navy’s last operational EA-6B Prowler, designed and built by Northrop Grumman, lifts off from Naval Air Station Whidbey Island, Wash. in a ceremonial fly-away June 27 from its long time operational base. The Navy is retiring the Prowler after nearly 45 years of service.   The U.S....
 
 

Lockheed signs agreements for two full-flight simulators

Lockheed Martin Commercial Flight Training and Airbus have signed a frame contract enabling Airbus to expedite procurement of flight simulation devices for their customers, Airbus training centers and their affiliates worldwide. The frame contract emphasizes the shared intent to partner on future training programs, and combines Airbus’ and Lockheed Martin Commercial Flight Training’s expert...
 
 

Drone Aviation receives order for U.S. Army aerostat system enhancement

Drone Aviation Holding Corp., a developer of specialized lighter-than-air aerostats and tethered drones, announced June 24 that its wholly owned subsidiary, Drone Aviation Corp., has been awarded an order from U.S. Government prime contractor BAE Systems for parts and services related to enhancing and supporting two WASP aerostat systems owned and operated by the U.S....
 

 

Boeing names Muilenburg as chief executive officer

The Boeing board of directors has elected Dennis A. Muilenburg the company’s 10th chief executive, succeeding W. James (Jim) McNerney, Jr., who held the position for the past 10 years. Muilenburg, who has served as Boeing president and chief operating officer since 2013, becomes president and CEO July 1. McNerney, who joined Boeing’s board of...
 
 
boeing-thailand

Boeing, Thai Airways International celebrate 25th direct 777 delivery

  Boeing and Thai Airways International Public Company Limited celebrated the Thailand flag carrier’s 25th direct 777 delivery, a 777-300ER (Extended Range), from the Boeing delivery center in Everett, Wash.  “...
 
 

General Dynamics receives $219 million for U.S. Army’s WIN-T increment 2 systems

General Dynamics received the first full rate production order from the U.S. Army to build additional Warfighter Information Network – Tactical (WIN-T) Increment 2 systems.  The $219 million order includes the production of more than 300 vehicle-based network communication nodes along with related equipment and materials. WIN-T Increment 2 is the Army’s communications backbone providin...
 




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>