United Technologies Q4 Profit Tops View; Backs 2014 Outlook

(RTTNews) - Diversified conglomerate United Technologies Corp. (UTX) reported Wednesday a profit for the fourth quarter that decreased 29 percent from last year, which was boosted by gains from discontinued operations.

Earnings per share from continuing operations topped analysts' expectations, while quarterly revenues missed their estimates. The company also maintained its earnings and revenue guidance for the full-year 2014.

"We saw an acceleration of organic growth throughout the year. Fourth quarter organic sales growth of 4 percent combined with continued orders strength gives us good momentum as we enter 2014," 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 $1.46 billion for the fourth quarter, lower than $2.06 billion in the prior-year quarter.

Net income from continuing operations increased 5 percent to $1.58 per share from $1.04 per share in the year-ago quarter. Excluding items, adjusted earnings per share from continuing operations increased 29 percent year-over-year.

Results for the latest quarter include $0.11 of restructuring charges, partially offset by $0.02 of net favorable one-time items, while the prior-year quarter included $0.25 of restructuring costs and one-time charges.

On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $1.53 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 2 percent to $16.76 billion from $16.44 billion in the same quarter last year, but missed seventeen Wall Street analysts' consensus estimate of $17.09 billion.

Sales growth reflect the benefit of organic sales growth (4 percentage points) partially offset by net divestitures (2 percentage points).

The company's segment operating margin improved 320 basis points to 14.6 percent from last year.

New equipment orders at Otis were up 8 percent, and UTC climate, controls & security equipment orders grew 5 percent organically from last year.

Large commercial engine spares orders rose 20 percent at Pratt & Whitney, and commercial spares orders also increased 19 percent at UTC Aerospace Systems.

For fiscal 2013, the company reported net income of $5.72 billion for the fourth quarter, higher than $5.13 billion in the prior year. Net income from continuing operations increased to $6.21 per share from $5.35 per share in the year ago. Net sales for the full year grew 9 percent to $62.63 billion from $57.71 billion in the previous year.

Analysts expected the company to report full-year 2013 earnings of $6.16 per share on annual revenues of $62.97 billion.

Looking ahead to fiscal 2014, the company said it is confident of its ability to deliver earnings in a range of $6.55 to $6.85 per share, on projected annual sales of about $64 billion. Street is currently looking for full-year 2014 earnings of $6.82 per share on annual revenues of $65.36 billion.

UTC said it expects to invest nearly $2 billion in capital expenditures in 2014, and continues to target cash flow from operations less capital expenditures equal to net income. The company also expects share repurchase and acquisition spend of $1 billion each in 2014, following $1.2 billion and $151 million, respectively, in 2013.

"With a portfolio and organization focused on our core markets, we have a strong foundation for earnings growth in 2014 and beyond," Chenevert added.

UTX closed Tuesday's regular trading session at $114.99, up $0.15 on a volume of 4.74 million shares. In the past 52-week period, the stock has been trading in a range of $86.81 to $115.98.