United Technologies Corp. forecast lower profit and sales next year than analysts projected even as the purchase of Goodrich Corp., the largest acquisition in aerospace, bolsters growth.
Earnings per share will climb as much as 16 percent to $5.85 to $6.15, the company said yesterday at a meeting in New York. The $6 midpoint of that prediction fell short of the $6.13 average of analysts’ estimates. United Technologies said revenue will climb 12 percent to $64 billion to $65 billion. Analysts had projected $66.2 billion.
Chief Executive Officer Louis Chenevert’s move to add Goodrich, the biggest maker of aircraft landing gear, to brands including Pratt & Whitney jet engines and Hamilton Sundstrand flight systems will add 70 cents a share to 2013 profit, he said. Higher pension costs, losses on Sikorsky helicopters being manufactured for the Canadian government and a sluggish global economy will temper those gains, the company said.
“Goodrich is doing everything I thought it would do when I announced the deal and more,” Chenevert said in a meeting with investors in New York. “There are still some challenges in the economy, but in the sectors in which we participate, we feel very comfortable.”
The lower end of United Technologies’ guidance will hold even if U.S. President Barack Obama and his opponents in Congress fail to reach an agreement to avert automatic budget cuts scheduled to take effect in January, Chenevert said. United Technologies’ defense sales will fall by a “mid-single-digit” percentage next year, the company forecast.
Sikorsky will reduce earnings by 21 cents a share next year, while low pension discount rates will lower profit by 25 cents a share, according to the presentation.
European revenue will be little changed next year, with the euro expected to trade around $1.28, according to the presentation. The currency has risen about 1 percent this year to $1.31.
United Technologies’ acquisition of a controlling stake in International Aero Engines, a joint venture with MTU Aero Engines AG and Japanese Aero Engines Corp. will add 5 cents a share to 2013 profit, the company said. That purchase along with Goodrich is helping drive aerospace sales to more than half of total revenue.
The company said 2012 earnings per share will be about $5.32 on revenue of $58 billion, matching analysts’ expectations.
United Technologies dropped 0.4 percent to $80.08 at 9:51 a.m. in New York. The shares have gained 10 percent this year through the market close yesterday, compared with a 13 percent advance for the Standard & Poor’s 500 index.