United Technologies Corp. (UTX) updated its financing plan for the proposed $16.5 billion cash acquisition of Goodrich Corp. (GR), including expected proceeds of approximately $3 billion from net divestitures and $1.5 billion from mandatory convertible instruments.
UTC businesses identified for sale include Pratt & Whitney Rocketdyne, Clipper Windpower and the Hamilton Sundstrand Industrial businesses: Milton Roy, Sullair and Sundyne. These businesses are treated as held for sale and have been moved to discontinued operations in UTC's financial statements. Gains realized at the time of closing are expected to be greater than impairment charges in discontinued operations, United Technologies said.
Including Goodrich, the company now expects earnings from continuing operations in 2012 of $5.30 to $5.50 per share, up 0 to 4 percent. On the same basis, the company now expects 2012 sales of $61 billion to $62 billion, up 9 to 11 percent and cash flow from operations less capital expenditures to equal or exceed net income attributable to common shareowners.
Analysts polled by Thomson Reuters expect the company to report earnings of $5.59 per share on revenues of $65.56 billion for fiscal 2012. Analysts' estimates typically exclude special items.
While announcing the fourth-quarter results, the company maintained its 2012 forecast for earnings in a range of $5.80 to $6.00 per share, up 6 to 9 percent from last year, for its base business excluding the pending Goodrich transaction. The company maintained full-year sales forecast between $59 billion and $60 billion.
United Technologies agreed in September last year to acquire aerospace components and systems supplier Goodrich for $127.50 per share in an all-cash deal valued at $18.4 billion, including net assumed debt of $1.9 billion. The acquisition is expected to close in mid-2012.
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