Business

February 22, 2013

United Technologies CEO sees federal budget cuts March 1 with impact on parts, repair business

The chief executive of United Technologies Corp. expects automatic federal budget cuts will take effect in eight days, taking a nick out of earnings of the aerospace giant.

CEO Louis Chenevert told investor analysts Feb. 21 that the cuts, which are known in Washington as the “sequester,” look more likely. He says earnings would be reduced by 10 cents per share in the “worst case.”

The impact on United Technologies would be limited this year, with more of an impact in 2014, he said.

“I would love it be solved, but it’s very manageable,” he said.

United Technologies posted 2012 earnings from continuing operations of $5.35 per share. Subsidiaries of the Hartford, Conn., conglomerate include military contractors such as jet engine maker Pratt & Whitney and Sikorsky Aircraft, which manufactures helicopters.

Chenevert said the impact would be mostly on repair and maintenance of aerospace parts. The earnings hit is accounted for in 2013 guidance of $5.85 to $6.15 per share, he said.

Questioned about what United Technologies will do with its cash, Chenevert said the company is committed to continuing dividend payments, is paying down debt and has a $1 billion placeholder for mergers and acquisitions.

But following its $18.4 billion purchase of airplane parts maker Goodrich Corp., United Technologies will commit only to small acquisitions for subsidiaries Carrier heating and ventilating equipment or Otis elevator, Chenevert said.

“We did the big deal,” he said. “Now we’re integrating and executing.”

United Technologies reported $4.82 billion in cash at the end of 2012, down 19 percent from 2011.

The company announced earlier this month it may buy back up to 60 million shares, replacing an approximately $4.3 billion stock buyback program which began almost three years ago and is nearly spent. It expects repurchases to total about $1 billion this year.

Companies buy back stock to reward shareholders since reducing the number of stock outstanding can lift earnings per share. AP

 




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


 
 

 

Headlines September 3, 2015

News Carter To China: US ‘Will Fly, Sail, Operate Wherever Law Allows’ Defense Secretary Ash Carter, in a speech billed as all about a new personnel approach for the Pentagon, laid out a clear line in the sand of the temporary islands the Chinese have been building. http://breakingdefense.com/2015/09/carter-to-china-us-will-fly-sail-operate-wherever-law-allows/ LRS-B details emerge: Major t...
 
 

News Briefs September 3, 2015

Soldier injured after parachute failed to deploy A soldier was injured during a U.S. Army Special Operations parachute training exercise in western Montana. Army officials at Fort Bragg, N.C., say 16 soldiers were conducting a free-fall parachute jump from two Blackhawk helicopters near Hamilton Aug. 31 when one soldier had an equipment malfunction and was...
 
 

Boeing, Jet2.com finalize order for 27 Next Generation 737-800s

Boeing and UK Leisure Airline Jet2.com have finalized an order for 27 Next Generation 737-800s, valued at approximately $2.6 billion at current list prices. Jet2.com currently operates an all-Boeing fleet of nearly 60 aircraft; however, this is the organization’s first direct Boeing order.† The aircraft will be used to take the company’s package holiday and...
 

 
boeing-emirates

Boeing, Emirates celebrate airline’s 150th 777 delivery

Boeing and Emirates Airline Sept. 3 celebrated the simultaneous delivery of three 777s — two 777-300ERs and one 777 Freighter — marking the entry of the 150th 777 into Emirates’ fleet. The delivery marks the first tim...
 
 

U.S. Air Force selects Chromalloy for F108 gas turbine engine module repairs

Chromalloy announced Sept. 2 that it has been selected by the U.S. Air Force to provide repairs on low pressure turbine modules for the F108 aircraft engine fleet, in a contract valued at up to $74 million. The one-year agreement was contracted by the Tinker Air Force Base in Oklahoma and includes four one-year options...
 
 
raytheon-colorado

Raytheon expanding in Colorado Springs

Raytheon will speed up growth of its Colorado Springs presence after signing a $700 million multi-year indefinite-delivery/indefinite-quantity contract to support operations at NORAD’s Cheyenne Mountain Complex. Under 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>