United Tech broad revenue growth helps profit beat Street
(Reuters) - United Technologies Corp (UTX.N) reported a higher-than-expected quarterly profit on Tuesday, helped by revenue growth across its aerospace and commercial building segments and strong sales in China.
The diversified manufacturer of elevators, jet engines and climate control systems, also lifted the low end of its 2014 earnings forecast.
Excluding divestitures, revenue increased 5 percent and rose across all five of the business segments at United Tech, a member of Dow Jones industrials index.
"Sales came in much better than what we expected," United Tech Chief Financial Officer Greg Hayes said in an interview.
First-quarter net income fell 4 percent to $1.21 billion, or $1.32 per share. Restructuring costs amounted to 9 cents a share while a year earlier the company received some one-time benefits.
Still, the earnings of $1.32 per share topped the average analyst estimate by 5 cents, according to Thomson Reuters
"Restructuring and corporate expenses were lower than we had anticipated, helping to drive the overall EPS 'beat'," RBC Capital Markets analyst Robert Stallard said in a research note.
Revenue rose 2.4 percent to $14.75 billion, just ahead of analyst estimates.
United Tech's businesses that serve buildings, such as Otis elevators and Carrier air conditioning units, are benefiting from growth of cities in emerging markets, such as China.
Otis' sales in China rose about 16 percent, while orders jumped about 25 percent, Hayes said. Sales at Otis increased 5 percent overall.
"Maybe a little bit of a surprise, China continued to be very strong for us," Hayes said.
Its Sikorsky helicopter division, which has dragged down United Tech results in recent quarters due to weak U.S. military spending, saw sales increase 9 percent. While the maker of Black Hawks saw lower U.S. military shipments, Hayes said that was offset by international military and commercial sales.
Its Pratt & Whitney jet engine segment, where the company is launching a newly designed engine for commercial aircraft, saw sales rise 4 percent, excluding divestitures.
United Tech projected full-year earnings of $6.65 to $6.85 per share, raising the low end from $6.55.
In offering a more bullish 2014 view, the company pointed to confidence in its full-year sales target of about $64 billion and to continued cost cuts. United Tech plans to spend $375 million on restructuring this year, up from its previous plan to spend $300 million.
Through Monday, United Tech shares had climbed 4 percent this year, ahead of the broader U.S. markets.
(Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn and Sofina Mirza-Reid)