UPDATE 3-United Technologies sees profit rising in 2013

Thu Sep 27, 2012 2:14pm EDT

* CFO predicts "solid" earnings growth next year
    * World economic growth slower than expected
    * Shares up 0.1 pct


    By Nick Zieminski
    Sept 27 (Reuters) - United Technologies Corp expects
"solid" earnings growth next year despite slower-than-expected
economic growth in the conglomerate's major markets, Chief
Financial Officer Greg Hayes said on Thursday.
    United Tech's acquisition of Goodrich Corp, which closed in
July, will add about 50 cents to 2013 earnings per share, Hayes
said. Earnings will also get a lift from recovering North
American markets for heating and cooling equipment and growth in
emerging markets, he said. 
    Headwinds include cuts in defense spending and weakness in
some parts of its commercial aerospace business. 
    "We will drive earnings growth next year - solid earning
growth," Hayes told an analyst meeting in Montreal that was
monitored via Webcast.
    The maker of Carrier air conditioners, Otis elevators and
Pratt and Whitney jet engines, reaffirmed its 2012 profit
forecast of $5.25 to $5.35 a share but did not provide an
earnings-per-share range for next year. Like other diversified
manufacturers, it is expected to do so in December. 
    United Technologies said several factors affecting its
results were hard to predict, including pricing, commodity
costs, the value of the dollar and the strength of commercial
construction, though Hayes noted a closely watched indicator of
non-residential construction had recently rebounded. The
outlooks for Europe's economies and U.S. tax rates and
government spending are also unclear.
    Shares rose 0.2 percent to $78.72 in afternoon trading. 
        
    SLOWER ECONOMIES
    The company trimmed its economic growth forecast for the
economies in which it operates. The world economy will grow by
2.6 percent next year, down from its year-ago forecast of 3.8
percent. 
    The United States, which accounts for 38 percent of sales,
will grow 1.8 percent in 2013, half a percentage point less than
United Tech had earlier forecast. 
     "Their forecast for 2013 depends on the election," said
Harvey Neiman, president of Neiman Funds Management LLC, which
owns United Tech shares. "United Tech is well-positioned to take
advantage of any increase in the economy. More sectors of the
economy are improving."
    Growth in Western Europe - contributing 23 percent of sales
- will be flat versus 1.6 percent growth expected a year ago.
Growth in Japan, China, India, and elsewhere was also revised
lower.
    The company said it expects to pay down $7 billion in debt
over the next few months, partly by repatriating overseas cash
and partly from recent asset sales.
    United Tech's jet engine unit Pratt & Whitney, which in June
closed its acquisition of International Aero Engines, said it
expects to increase earnings next year and said it was on a path
to double sales by 2020 from 2010's $12.2 billion. Next year's
sales will be up by mid-single digits, said David Hess, the
division's president.
    "We're going to grow earnings next year. I can guarantee
that," Hess said.
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