United Technologies CEO Sees Profit Intact Amid Defense Cutbacks
March 15 (Bloomberg) -- United Technologies Corp. (UTX), the maker of fighter-jet engines and Black Hawk helicopters, will meet its 2013 profit forecast even as automatic cuts shrink U.S. military spending, its chief executive officer said.
“We’ve properly calibrated for 2013 that the worst-case scenario is about 10 cents of EPS,” Louis Chenevert said today in an interview with Betty Liu on Bloomberg Television’s “In the Loop.” “It’s too early to really calibrate what it’s going to do in ’14, but I’m really hopeful they can solve the sequestration issues we’ve encountered.”
United Technologies affirmed its per-share earnings forecast of $5.85 to $6.15 on sales of $64 billion to $65 billion. The Hartford, Connecticut-based company received 17.5 percent of last year’s $57.7 billion of revenue from the U.S. government, according to data compiled by Bloomberg.
Congress mandated $1.2 trillion of across-the-board spending reductions, known as sequestration, as part of a 2011 agreement to raise the federal borrowing limit. “Uncertainty” from the initial $85 billion of cuts that took effect March 1 is making businesses reluctant to invest, Chenevert said.
“It’d be important for Washington to make a decision as soon as possible that creates that certainty in the environment that, in my view, will create a lot of momentum in the economy,” Chenevert said.
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