* Lowers profit target to $4-$4.50/shr
* To cut another 11,600 jobs or 5 pct of workforce
* Not counting on economic recovery in 2009
* Shares up 6.7 percent
(Recasts first sentence to include job cuts, adds analyst
comment, updates share movement)
By Scott Malone
BOSTON, March 10 (Reuters) - United Technologies Corp
(UTX.N), whose products range from elevators to jet engines,
plans to cut 11,600 jobs as it adapts to an economy that has
grown worse than it expected just three months ago.
The diversified U.S. manufacturer also cut its 2009 profit
forecast by roughly 13 percent and lowered its revenue target
as it is no longer relying on an economic recovery later this
year, its chief executive said on Tuesday.
United Tech shares rose about 6.7 percent amid a broad
stock market rally as Wall Street had regarded the company's
profit target set in December as optimistic.
"Conditions have gotten very challenging," CEO Louis
Chenevert told investors in a presentation that was monitored
over the Web. "We intend to be fully prepared for a deeper and
longer deterioration in market conditions."
Combined with 2008 job cuts, the latest restructuring plan
will reduce the Hartford, Connecticut-based company's workforce
by about 18,000 positions.
As of December, United Tech employed about 220,000 people.
"The economic recovery previously anticipated in the second
half of 2009 now appears unlikely," Chenevert said.
The world's largest maker of elevators and air conditioners
said it expected to earn $4 to $4.50 per share in 2009, lower
than the $4.65 to $5.15 it previously forecast.
Analysts were looking for profit of $4.60 per share,
according to Reuters Estimates.
United Tech said it expected $750 million in restructuring
costs this year, partly offset by $200 million to $350 million
in gains. All told, one-time items will weigh profits down by 30
to 40 cents per share for the year.
The company, which also makes Sikorsky helicopters, now
looks for revenue of $55 billion this year, down from a prior
forecast of about $57 billion. It said it would cut its planned
budget to repurchase shares by half to $1 billion.
It plans to reduce capital spending about 20 percent from
2008 levels, to below $1 billion.
One investor said the moves were a sign that United Tech
was trying to stay a step ahead of a deteriorating world
economy.
"The more you can get ahead of the ball, rather than behind
it, you're going to get ahead in this marketplace," said Peter
Klein, senior portfolio manager at Fifth Third Asset Management
in Cleveland, Ohio, which owns United Tech shares.
AVIATION, CONSTRUCTION WEAK
United Tech's Carrier air conditioning business is being
hard hit by a slumping construction market, while its Pratt &
Whitney jet engine arm is feeling the pinch of fewer people
flying, both on commercial jets and private planes.
"We are seeing significant pressure on commercial building
installations and business-jet related markets," wrote Deutsche
Bank analyst Nigel Coe, in a note to clients.
United Tech, which also makes Sikorsky helicopters, said it
was holding its targeted takeover budget steady at $2 billion.
"There are some really good values out there for certain
properties," Chenevert said. "We are a willing buyer and as
long as we encounter a willing seller at some point in time,
deals will be made."
But he cautioned the company would be shying away from
hostile bids. The company last year unsuccessfully pursued a
takeover of Diebold Inc (DBD.N), a maker of automated-teller
machines.
"I don't think this is a good environment for hostile
activity," Chenevert said.
United Tech's 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.
Its shares were up $2.52 at $40.08 on the New York Stock
Exchange on Tuesday afternoon.
At Monday's close, the stock had fallen 44 percent over the
past year, in line with the 45 percent slide of the Dow Jones
industrial average. .DJI
(Editing by Steve Orlofsky and Matthew Lewis)
