UPDATE 3-United Tech results top Wall Street forecasts

* Earns $1.14/shr vs. $1.12/shr consensus

* Revenue down 11 pct

* Tightens FY EPS forecast to $4.10/shr

* Shares down 1 percent (Adds CFO, investor quotes, updates stock action)

By Scott Malone

BOSTON, Oct 20 (Reuters) - Diversified U.S. manufacturer United Technologies Corp (UTX.N) reported a 17 percent drop in third-quarter profit, that nonetheless beat Wall Street estimates, as cost-cutting helped offset slumping demand.

The world's biggest maker of elevators and air conditioners said on Tuesday that order rates for its products have begun to stabilize after a brutal downturn, with demand beginning to pick up in China.

But its shares sold off about 1 percent as the company took a conservative tone in its outlook on 2010 -- reiterating its prior statements that it would grow profit next year thanks to aggressive cost-cutting that has reduced headcount by about 15,000 since the slump started.

"UTC will grow earnings in the fourth quarter, despite the continuing difficulty in many of our key markets," said Chief Financial Officer Greg Hayes, on a conference call with analysts.

The maker of Black Hawk military helicopters and Pratt & Whitney jet engines tightened its 2009 earnings forecast to $4.10 per share, the midpoint of its prior range.

Investors said the news of stabilizing orders boded well for future revenue.

"For a company like United Technologies, it's all about the orders," said Jason Small, assistant portfolio manager at Chartwell Investment Partners in Berwyn, Pennsylvania, which owns United Tech shares. "I'm willing to give them a pass on revenue as long as the orders are improving."

United Tech shares fell 62 cents to $64.82 on the New York Stock Exchange.

PROFIT, REVENUE BEAT STREET

United Tech said third-quarter profit came to $1.06 billion, or $1.14 per share, down from $1.27 billion, or $1.33 per share, a year earlier.

Analysts, on average, had looked for profit of $1.12 per share, according to Thomson Reuters I/B/E/S.

Revenue fell 11 percent to $13.38 billion, as the company faces slumps in the commercial construction and aviation markets. Wall Street had expected $13.31 billion in revenue.

It said it now expects to report full-year profit of $4.10 per share. The company had twice cut its 2009 profit forecast, in July setting a target of $4.00 to $4.20 per share, down from its initial December target of $4.65 per share to $5.15 per share.

The Hartford, Connecticut-based company has cut costs aggressively through the downturn, eliminating about 5 percent of its staff, as it copes with falling demand.

United Tech said last week that Chenevert will succeed George David as chairman on Jan. 1, completing a transfer of power that has been going on for three years. Chenevert said he does not expect to make additional significant changes to the management team.

United Tech shares have risen about 21 percent so far this year, outpacing the 15 percent rise of the Dow Jones industrial average .DJI.

Its competitors include Eurocopter, a unit of EADS (EAD.PA), in helicopters; General Electric Co (GE.N) in jet engines; and ThyssenKrupp (TKAG.DE) in elevators. (Reporting by Scott Malone; Editing by Derek Caney and Gerald E. McCormick)