United Technologies Q2 Profit Tops View; Boosts 2013 EPS Outlook

(RTTNews) - Diversified conglomerate United Technologies Corp. (UTX) reported Tuesday a profit for the second quarter that increased six percent from last year, reflecting revenue growth.

Earnings per share from continuing operations topped analysts' expectations, while quarterly revenues missed their estimates. The company also raised its earnings guidance for the full-year 2013, while anticipating annual revenues at the low end of prior forecast.

"We had a solid first half of the year and continued to deliver. Strong execution, additional restructuring savings, and growing backlogs give us confidence to increase the lower end of our earnings per share range," Chairman and CEO Louis Chenevert said in a statement.

The Hartford, Connecticut-based parent company of jet engine manufacturer Pratt & Whitney, Otis elevator, and Sikorsky aircraft reported net income of $1.56 billion for the second quarter, higher than $1.33 billion in the prior-year quarter.

Net income from continuing operations increased 5 percent to $1.70 per share from $1.62 per share in the year-ago quarter. Excluding items, adjusted earnings per share from continuing operations increased 4 percent year-over-year.

Results for the latest quarter include $0.05 per share of favorable one-time items net of restructuring costs, while the prior year's results included a $0.04 benefit from one-time items net of restructuring costs.

On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $1.57 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 16 percent to $16.01 billion from $13.81 billion in the same quarter last year, but missed twenty Wall Street analysts' consensus estimate of $16.37 billion. Sales growth reflect the benefit of net acquisitions, while organic sales were flat with the year-ago quarter.

The company's segment operating margin decreased 30 basis points to 16.2 percent from last year.

New equipment orders at Otis were up 23 percent, led by 39 percent growth in China, and UTC climate, controls & security equipment orders grew 6 percent organically from last year.

Large commercial engine spares orders surged 65 percent at Pratt & Whitney including the benefit from the incremental International Aero Engines share.

Commercial spares orders grew 15 percent organically at Pratt & Whitney. On a pro-forma basis, adjusted to include Goodrich in both years, commercial spares orders increased 4 percent at UTC Aerospace Systems.

Looking ahead to fiscal 2013, the company raised its earnings guidance to a range of $6.00 to $6.15 per share from the prior forecast range of $5.85 to $6.15 per share. The company also now projects annual sales at $64 billion, the lower end of the prior guidance range of between $64 billion and $65 billion.

Street is currently looking for full-year 2013 earnings of $6.11 per share on revenues of $64.50 billion.

UTC said it now expects to invest $450 million in restructuring for 2013, up from the prior estimate of $350 million. Meanwhile, the company anticipates restructuring expenses to be offset by one-time items.

"With the closing of the Rocketdyne divestiture in June, UTC's portfolio transformation is complete and our focus is squarely on execution. Goodrich and IAE continue to exceed expectations and create new opportunities for sustainable long-term organic growth," Chenevert added.

UTX closed Monday's regular trading session at $102.11, down $1.42 on a volume of 3.03 million shares. In the past 52-week period, the stock has been trading in a range of $71.40 to $103.53.