UTC Second-Quarter Profit Up On Lower Revenues
By STEPHEN SINGER, AP Business Writer
HARTFORD, Conn. (AP) _ United Technologies Corp. said Thursday that its second-quarter profit ticked up just 1 percent as orders fell at its jet engine and elevator businesses.
The company also said it received full regulatory approval for its purchase of Goodrich Corp. and has closed the $18.4 billion deal, the biggest deal ever in the aircraft industry. The Justice Electric Power Systems business and Pump and Engine Controls business as part of the approval, as well as Goodrich’s interest in a joint venture with Rolls-Royce. United Technologies said the regulatory conditions were expected.
The European Commission has also given conditional approval to the Goodrich acquisition.
United Technologies said former Goodrich President and CEO Marshall Larsen will join the company’s board.
In an unusual move intended to highlight the importance of the Goodrich deal, United Technologies’ CEO Louis Chenevert participated in Thursday’s conference call with analysts.
Previously, the quarterly earnings call was led by Chief Financial Officer Greg Hayes.
Chenevert called the Goodrich deal a “historic moment” for the company and said he is “very pleased” that United Technologies closed on the large transaction in just 10 months “with limited required divestitures.”
United Technologies revenue for the April-June period was $13.81 billion, down 5 percent from the year-ago quarter. Net income of $1.33 billion, or $1.62 per share, was up 1 percent.
Accounting for discontinued operations that include a business sold to finance United Technologies’ $16.5 billion purchase of aerospace manufacturer Goodrich Corp., earnings were $1.47 per share.
Profit beat Wall Street expectations of $1.42 per share but fell short for revenue of $14.44 billion.
New equipment orders at Otis Elevator were down 7 percent over last year’ second quarter. The company said that includes unfavorable foreign exchange amounting to 3 percentage points.
Airline spare parts orders fell 15 percent at jet engine manufacturing subsidiary Pratt & Whitney and fell 10 percent in the quarter at aerospace parts manufacturer Hamilton Sundstrand.
New equipment orders in North America rose 4 percent for heating and cooling equipment maker Carrier.
The Hartford, Conn., manufacturer of jet engines, elevators, heating and cooling equipment for homes and businesses and other aerospace and building systems cut its 2012 profit guidance, citing the slowing global economy and weak euro. Per-share earnings are expected to be between $5.25 and $5.35, down from previous guidance of $5.30 to $5.50 per share.
It also cut its 2012 revenue outlook to between $58 billion and $59 billion from $61 billion to $62 billion.
Edward Jones analyst Matt Collins said investors have already “written off 2012” and are looking to a stronger 2013, although he found some positive news in the quarter.
“Good execution trumped a bad environment,” Collins said. United Technologies has been busy selling smaller businesses to help finance the Goodrich deal and bolster its core aerospace business. On Wednesday it said it had sold three industrial-products companies for $3.46 billion. That followed by two days the announcement of the $550 million sale of its wind power business.
United Technologies also plans to sell its fuel cell business.
In midday trading United Technology shares rose 15 cents to $72.76 in afternoon trading.
(Copyright 2012 by The Associated Press. All Rights Reserved.)