Diversified conglomerate United Technologies Corp. (UTX: Quote) reported Thursday a profit for the second quarter that edged up from last year, reflecting improved margins. This despite a decline in revenues.
Earnings per share topped analysts' expectations, while quarterly revenues missed their estimates. The company also trimmed its earnings and revenue guidance for the full-year 2012, citing the slowing global economy and a weaker Euro.
"UTC delivered solid operating performance while sustaining our investment in game-changing technology in the face of a challenging economic environment," Chairman and CEO Louis Chenevert said in a statement.
United Technologies completed the acquisition of Rolls Royce's interests in International Aero Engines in late June. It is also expected to close the $16.5 billion cash acquisition of defense contractor Goodrich Corp. (GR) later in the week. The deal received the last of the regulatory clearances from U.S. Department of Justice and the European Commission earlier in the day.
The company is in the previously announced process of selling some of its units to help fund the Goodrich deal. It agreed to sell late Wednesday the industrial businesses of its Hamilton Sundstrand subsidiary to private equity firms Carlyle Group L.P. (CG) and BC Partners Ltd. in a $3.46 billion deal.
"The Goodrich and IAE transactions better position UTC to serve the growing aerospace market. We are concluding on the substantial transformational changes to our portfolio that will generate shareholder value well into the future," Chenevert added.
The Hartford, Connecticut-based parent company of jet engine manufacturer Pratt & Whitney, Otis elevator, and Sikorsky aircraft reported net income of $1.33 billion for the second quarter, slightly higher than $1.32 billion in the prior-year quarter.
Net income from continuing operations increased 15 percent to $1.62 per share from $1.41 per share in the year-ago quarter. Excluding items, adjusted earnings per share from continuing operations increased 13 percent year-over-year.
On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $1.41 per share for the second quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter decreased 5 percent to $13.81 billion from $14.47 billion in the same quarter last year, and missed seventeen Wall Street analysts' consensus estimate of $14.44 billion. Net divestitures and foreign currency translation accounted for $0.8 billion of the sales decline.
The company's segment operating margin improved 70 basis points to 16.5 percent from last year.
New equipment orders at Otis were down 7 percent, while commercial HVAC new equipment orders at UTC Climate, Controls & Security grew 4 percent from last year.
Commercial spares orders at Hamilton Sundstrand declined !0 percent, and were down 15 percent at Pratt & Whitney's large engine business from the year ago second quarter.
Looking ahead to fiscal 2012, the company trimmed its earnings guidance to a range of $5.25 to $5.35 per share from the prior forecast range of $5.30 to $5.50 per share. The company also now projects annual sales between $58 billion and $59 billion, down from the previous outlook of $61 billion to $62 billion.
Street is currently looking for full-year 2012 earnings of $5.45 per share on revenues of $61.29 billion.
In Thursday's regular trading session, UTX is currently trading at $74.41, up $1.80 or 2.48% on a volume of 1.12 million shares. In the past 52-week period, the stock has been trading in a range of $66.87 to $87.50.
| || |
| To receive FREE breaking news email alerts for United Technologies Corp. and others in your portfolio|
by RTT Staff Writer
For comments and feedback: email@example.com