Business

April 24, 2013

United Technologies first quarter net income, revenue rise

Stephen Singer
Associated Press

The biggest aerospace deal ever is paying off for United Technologies Corp.

The Hartford, Conn., aerospace and building systems conglomerate said April 23 that its purchase of aerospace parts maker Goodrich Corp. boosted first-quarter revenue even as sales flagged in Europe, which is struggling with a weak economy. The $18.4 billion deal was announced in 2011 and closed in July 2012.

ìGoodrich has been nothing but good news for us,î Chief Financial Officer Greg Hayes told investor analysts on a conference call.

Revenue in the January-to-March period rose 16 percent to $14.4 billion from $12.4 billion in the year-ago quarter. Excluding the Goodrich acquisition, sales declined 2 percent from a year ago. United Technologies said that was due to Europe’s slack economy and weak commercial aerospace repairs and maintenance.

Net income of $1.27 billion, or $1.39 per share, was up from $330 million, or 36 cents per share, in the year-ago quarter that included discontinued operations of companies sold by United Technologies to raise cash for its Goodrich purchase. Excluding the discontinued operations, profit in last year’s first quarter would have been $1.31 per share.

Analysts polled by FactSet, on average, expected earnings of $1.29 per share on revenue of $14.94 billion.

CEO Louis Chenevert said he expects a ìgradual resumptionî of growth this year as the economy and markets improve. In addition to the aerospace industry, commercial and residential real estate markets are important to United Technologies, which sells elevators and escalators, heating and cooling components and fire and safety equipment.

Edward Jones analyst Christian Mayes said a 29 percent increase in orders for subsidiary Otis elevator in China, the world’s largest elevator and escalator market, will likely offset weakness in Europe. He said United Technologies will likely cut costs at Goodrich and its $1.5 billion purchase of Rolls-Royce from a joint venture that makes engines for the Airbus A320.

Last year it was closing on acquisitions, this year it’s about integrating the acquisitions and finding savings, he said.

Among United Technologies’ segments, its aerospace systems business posted the biggest sales increase in the quarter, to $3.26 billion, more than double $1.24 billion posted in the first quarter of 2012.

The CFO Hayes said airline traffic is increasing and airlines are projected to earn more than $10 billion this year, buoying expectations for rising order rates in 2013.

So we’ll keep a close eye on the aerospace aftermarket, look for signs of more stabilization in Europe, but order rates and macroeconomic trends broadly support our assumption for growth as we move through the year, he said.

Automatic federal budget cuts that took effect last month are beginning to have an impact on United Technologies’ military business, with aerospace repairs and maintenance down 10 percent in the quarter, Hayes said.

Fighter jets also are standing down for the rest of the year as exhibitions are canceled, he said.

He said he’s concerned about furloughs by air traffic controllers that could drive up commercial airline costs, though that should be a ìrelatively small impactî on United Technologies. The company is standing by its estimate of a 10 cent-per share profit hit due to the federal spending cuts, Hayes said.

Sales for the quarter declined 7 percent at Sikorsky Aircraft as the helicopter manufacturer adjusts to reduced U.S. military involvement in Afghanistan. United Technologies’ climate controls and security business also posted a 7 percent drop in sales in the first quarter.

The company, which is raising significant amounts of cash from divestitures to exit non-essential business and comply with federal competition rules, said it will pay down $2 billion of debt this year, up from an earlier $1 billion estimate.




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


 
 

 

Headlines April 23, 2014

News: U.S. conducts spy flights over Russia - After a tit-for-tat series of delays, the United States conducted an Open Skies Treaty intelligence flight over Russian territory April 21, a State Department official said.  Army paratroopers heading to Poland after Russian annexation of Crimea - U.S. Army paratroopers are arriving in Poland to begin a series of...
 
 

News Briefs April 23, 2014

U.S. military deaths in Afghanistan at 2,177 As of April 22, 2014, at least 2,177 members of the U.S. military had died in Afghanistan as a result of the U.S.-led invasion of Afghanistan in late 2001, according to an Associated Press count. The AP count is one less than the Defense Department’s tally. At least...
 
 

Northrop Grumman sets new greenhouse gas emission reduction goal of 30 percent by 2020

Northrop Grumman announced April 22 its commitment to reduce greenhouse gas emissions by 30 percent from 2010 levels by 2020, as part of its commemoration of Earth Day.   “Northrop Grumman is dedicated to top performance in environmental sustainability,” said Wes Bush, chairman, chief executive officer and president. “This new goal sets the bar significantly...
 

 

Lockheed Martin demonstrates enhanced ground control system, software for small UAV

Lockheed Martin’s Group 1 family of unmanned aircraft systems is migrating to enhanced automation capabilities using its Kestrelô “Fly Light” flight control systems and industry-leading mobile Ground Control Station software. The increased automation allows operators to focus on executing the mission, rather than flying various aircraft. Earlier this year, Lockheed MartinR...
 
 

U.S. Navy awards General Dynamics $33 million to operate, maintain military sealift ships

The U.S. Navy has awarded General Dynamics American Overseas Marine LLC a $32.7 million contract modification to operate and maintain seven large, medium-speed, roll-on / roll-off ships for the Military Sealift Command. AMSEA is a wholly owned subsidiary of General Dynamics. Under the terms of the modification, AMSEA will provide services including crewing, engineering, maintenance,...
 
 

US Navy deploys Standard Missile-3 Block IB for first time

In partnership with the Missile Defense Agency, the U.S. Navy deployed the second-generation Standard Missile-3 Block IB made by Raytheon for the first time, initiating the second phase of the Phased Adaptive Approach. “The SM-3 Block IB’s completion of initial operational testing last year set the stage for a rapid deployment to theater,” said Dr....
 




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>