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.


 
 

 
NG-people2

Northrop Grumman names VP, mission assurance for Electronic Systems sector

Northrop Grumman has appointed Sonal B. Deshpande vice president of mission assurance for the company’s Linthicum-based Electronic Systems sector. In this position, Deshpande is responsible for mission assurance across th...
 
 
sikorsky-raider

Sikorsky S-97 Raider helicopter achieves successful first flight

Sikorsky Aircraft Corp., a United Technologies Corp. subsidiary, announced May 22 the successful first flight of the S-97 Raider™ helicopter, a rigid coaxial rotor prototype designed to demonstrate a game-changing combination...
 
 
NG-people

Northrop Grumman appoints VP, program manager ISR division

Northrop Grumman announced it has appointed Steve Lunny, vice president and program manager for the intelligence, surveillance and reconnaissance division within the company’s Information Systems sector. Lunny will report...
 

 

HELLADS laser completes development

General Atomics Aeronautical Systems, Inc. announced May 21 that the High-Energy Liquid Laser completed the U.S. government acceptance test procedure and is now being shipped to the White Sands Missile Range, N.M. At WSMR, the laser will undergo an extensive series of live fire tests against a number of military targets.  GAASI is a leading...
 
 
boeing-transaero

Boeing delivers Transaero’s first Next-Generation 737-800

Boeing May 22 delivered Transaero’s first Next-Generation 737-800. The airplane, sporting a new livery, arrived at Moscow’s Domodedovo Airport. Boeing May 22 delivered Transaero’s first Next-Generation 737-800. The airpla...
 
 
Boeing photograph

Boeing-upgraded French AWACS take flight

Boeing photograph A French AWACS aircraft patrols the skies as part of a routine mission. The French AWACS fleet is in the midst of the Mid-Life Upgrade that modernizes the capabilities on board. Initial operating capability of...
 




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>