United Technologies Cuts Annual Forecast on Aerospace, OtisRichard Clough
United Technologies Corp. cut its 2015 profit forecast for the second time in just over a month, citing weak demand in the units making aerospace parts and Otis elevators.
Excluding the Sikorsky helicopter business being sold to Lockheed Martin Corp., earnings this year will be $6.15 to $6.30 a share, down from $6.35 to $6.55, United Technologies said Tuesday in its second-quarter earnings report. The company also reduced its annual sales projection.
United Technologies is fighting currency headwinds and softening sales in several industries, and it decided to shed Sikorsky and re-emphasize its primary business lines of aerospace and building services. For 2015, UTC Aerospace Systems’ after-market sales and Otis’s foreign operations are faring worse than the Hartford, Connecticut-based company expected.
The shares fell 3.4 percent to $106.68 at 7:23 a.m. before regular New York trading. The stock slid 3.9 percent this year through Monday, compared with a 3.4 percent increase in the Standard & Poor’s 500 Index.
United Technologies said Monday it would sell Sikorsky for $9 billion in a deal expected to close by the first quarter of 2016. Along with the transaction, the board approved a 75 million-share buyback plan to offset the earnings impact of the deal.
Last month, the company cut its 2015 earnings forecast due to a combination of separation costs for Sikorsky and operational challenges resulting from weakness in the oil and gas markets.
Full-year sales will be $57 billion to $58 billion, down from a prior range of $58 billion to $59 billion, United Technologies said. Second-quarter per-share profit was $1.73, topping the $1.72 average of 14 estimates compiled by Bloomberg.
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