United Technologies Profit Exceeds Estimates on AerospaceTim Catts
United Technologies Corp. reported first-quarter earnings that topped analysts’ estimates as sales of aerospace equipment surged after the acquisition of Goodrich Corp.
Net income of $1.39 a share compared with the average $1.29-a-share estimate by 22 analysts in a Bloomberg survey. Profit from continuing operations gained 6.8 percent to $1.27 billion, and sales climbed 16 percent, the Hartford, Connecticut-based company said in a statement.
United Technologies is benefiting from Chief Executive Officer Louis Chenevert’s moves to increase the company’s focus on the aviation industry, including buying Goodrich for $16.5 billion and taking over Rolls-Royce Holdings Plc’s share of an engine-making joint venture last year. Excluding the effect of such deals, revenue slumped 2 percent in the first quarter.
“The integration of our two major acquisitions is continuing very well, and they’re delivering really strong performance for us,” Chenevert said in a telephone interview. “We also see some signs of improvement in macroeconomic trends, and there are actually some positives in Europe.”
Earnings in the aerospace systems division more than doubled to $501 million, bolstered by the purchase of Goodrich, the world’s largest manufacturer of aircraft landing gear. The company will pay down $2 billion of debt this year from the deal, the largest in the history of the aerospace industry, twice as much as planned at the end of 2012.
Pratt & Whitney, which makes jet engines, saw operating profit climb 4.4 percent to $406 million, bolstered by United Technologies’ larger share of the International Aero Engines venture.
Operating profit at the Otis elevator division climbed 1.6 percent in the quarter to $575 million. Its orders grew by 24 percent, led by a 29 percent increase in China.
“Otis has been very aggressively taking on that market and the orders were just phenomenal, and they’ve been growing over the past few quarters,” Christian Mayes, an Edward Jones & Co. analyst, said in a telephone interview. He has a buy rating on the stock.
United Technologies fell 0.8 percent to $92.89 today in New York. The shares previously climbed 14 percent this year, outpacing a 9.6 percent gain by the Standard & Poor’s 500 Index.
One-time items, including a gain from the extension of a tax credit for research and development expenses, added 11 cents to United Technologies’ earnings per share in the quarter, the company said in the statement.
Net income of $1.266 billion compared with $330 million a year earlier when Rocketdyne, Clipper Windpower and Hamilton Sundstrand’s pump- and compressor-making units were discontinued.
Revenue increased to $14.4 billion, trailing the average $14.9 billion estimate of 17 analysts. The company reaffirmed a forecast for full-year profit of $5.85 to $6.15 a share on $64 billion to $65 billion of sales.