June 24, 2018
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United Tech’s 1Q profit up minus business sales

David Veno, a machinist at Pratt & Whitney's plant in North Berwick, Maine, checks the fixture prior to beginning a vertical turret lathe operation in this February 2012 file photo. (Courtesy Pratt & Whitney)
By STEPHEN SINGER, AP Business Writer

HARTFORD, Conn. (AP) — United Technologies Corp. said Tuesday that net income from continuing operations rose more than 19 percent during the first quarter, factoring out the businesses that the manufacturer put up for sale.

That would equate to earnings of $1.26 billion, or $1.31 per share, compared with earnings from those same operations last year of $1.05 billion, or $1.06 per share.

That tops the $1.21 expected on Wall Street, according to a poll by FactSet.

The parent company of jet engine maker Pratt & Whitney, Otis elevator, Carrier heating and cooling and other aerospace and building systems companies said revenue was $12.42 billion in the January-March quarter, down 2 percent from the same period last year. It was the first drop in revenue since early 2010.

The company employs roughly 1,350 people at its South Berwick plant in Maine, making it one of the state’s largest private employers.

Revenue, which reflected divestitures and unfavorable foreign currency exchange rates, fell short of the $12.88 billion expected by analysts surveyed by FactSet.

Including the discontinued operations, net income fell to $330 million, compared with $1.01 billion last year. Carrier is credited for helping boost earnings toward the end of the quarter with stronger residential orders.

Sales were down slightly at Otis elevator as orders fell 9 percent over the first quarter of 2011, driven by the expected slow start to the year in China.

Citing the “uneven economic environment,” United Technologies said it will spend $450 million on restructuring costs to this year, up from the previous predictions of $350 million. It expects one-time gains to rise to $600 million, from $500 million.

United Technologies, based in Hartford, Conn., backed its previous guidance of per-share earnings of $5.30 to $5.50 for the year. That would be flat to up 4 percent from 2011.

The company last month said that it would sell of numerous businesses, including rocket engine, wind power operations for $3 billion in order to help finance a $16.5 billion acquisition of aerospace supplier Goodrich. It also will take on between $8 billion and $10 billion in short- and long-term debt, use $3 billion in cash and $1.5 billion in mandatory convertible issues.

The announcement cheered investors who had criticized its initial plan to issue as much as $4 billion in equity to contribute to the Goodrich deal.

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