UPDATE 2-United Technologies gives muted view for 2014
Dec 12 (Reuters) - United Technologies Corp, the world's largest maker of elevators and air conditioners, on Thursday projected earnings to rise 7 percent to 11 percent next year, barely meeting analysts' targets, and gave a revenue view that fell short of Wall Street expectations.
The diversified U.S. manufacturer, which also makes Pratt & Whitney jet engines and Black Hawk helicopters, is being weighed down by its defense business, while sales are expected to be strong next year for its Otis elevators branch.
United Technologies said it expects earnings in a range of $6.55 to $6.85 per share for next year. Analysts on average were looking for earnings of $6.84 per share, according to Thomson Reuters I/B/E/S.
The company said it expected 2013 earnings of about $6.15 per share, the high end of its earlier forecast which translates to growth of about 15 percent.
The company forecast revenue of about $64 billion next year. Analysts were looking for about $66.3 billion.
At a meeting for analysts in New York, United Technologies Chief Executive Louis Chenevert pointed to its building and industrial systems business, which includes Otis elevators, and its aerospace unit as profit drivers next year.
The company is benefiting from two global trends, Chenevert said, urbanization and growth in commercial flight. For example, developing markets "spend a fraction of the developed markets" on air conditioning products such as those sold by the company.
"We're well positioned to take advantage of the two megatrends," Chenevert said.
Chenevert predicted "modest" improvement in the global economy next year. He said there were "signs of stability" in Europe.
"Europe has bottomed out," Chenevert said.
Uncertainty over the U.S. government sequestration program, which involves spending cuts on federal projects, has hurt the company's military business, which accounts for about 18 percent of revenue.
For example, spare part orders at its Sikorsky unit, which produces Black Hawks, have been way down, the company said during its third-quarter report.
Chenevert said the defense area remains "under pressure," but that the situation could improve with a U.S. budget deal.
"Looks like sequestration could be less of an impact next year," he told reporters after the meeting.
The company also said it was setting aside about $1 billion each next year for share repurchases and acquisitions. Chenevert told reporters he expected only small transactions next year. "At this point in time, I don't see us in '14 doing anything of size," the CEO said.
The company expects to spend $2 billion on capital expenditures next year, more than twice the level of recent years, as it spends on equipment for future aerospace production.
Through Thursday's trading, before the company released its forecasts, United Technologies shares had climbed some 32 percent this year, outpacing the broader market.
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