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United Technologies posts drop in first quarter profit

April 21, 2009, Hartford CT.- United Technologies Corp. said Tuesday its first-quarter profit fell 28 per cent.


April 21, 2009
By Carey Fredericks

April 21, 2009, Hartford CT.- United Technologies Corp. said Tuesday its first-quarter profit fell 28 per cent as the U.S.-based industrial conglomerate coped with falling orders related to the drop in office and residential construction.

The company’s net income attributable to common shareholders fell to US$722 million, or 78 cents per share, from $1 billion, or $1.03 per share, in the same period last year. The latest quarter’s results include 12 cents per share in restructuring costs and a tax benefit of three cents per share.

Revenue slid to $12.2 billion from $14 billion.

Analysts surveyed by Thomson Reuters expected earnings of 78 cents per share. Analyst estimates typically exclude one-time items.

The Hartford, Conn.-based conglomerate – which owns business jet engine maker Pratt & Whitney Canada – said the declines in profit and revenue were driven by a drop in orders for Otis elevators and Carrier heating, ventilating and equipment, as well as the strength of the dollar.

Operating profit fell at all units except its Sikorsky aircraft unit, which has benefited from strong military orders as the Obama administration moves more troops into Afghanistan. Operating profit jumped 29 per cent to $116 million from $82 million.

Meanwhile, quarterly operating profit at Carrier plunged to $22 million from $248 million. The unit has been hurt by a drop in residential and office construction and a decline in transportation using refrigeration.

Profit fell at Otis to $506 million from $580 million as office construction in China slowed.
“As anticipated, order trends were weak in the quarter although we saw stabilization in the rate of year-over-year decline across most of our businesses in March,” chief executive Louis Chenevert said in a statement.

United Technologies reiterated its revenue guidance of $55 billion and its earnings forecast of $4 to $4.50 per share for the full year.

Analysts surveyed by Thomson Reuters expect profit of $4.20 per share for the year on revenue of $54.3 billion.

United Technologies said it is pursuing a previously announced $750 million restructuring program for the year and initiated $163 million in restructuring actions during the first quarter.