By Lewis Krauskopf
March 13 Diversified manufacturer United
Technologies Corp. forecast sales may approach $100
billion by the end of the decade, up from roughly $64 billion
expected for 2014, as the company grows at about twice the pace
of the global economy.
Despite the upbeat long-term outlook, shares of the large
manufacturer of jet engines, elevators and climate control
systems fell 2.2 percent after it forecast first-quarter profit
below Wall Street's target. The stock was the biggest decliner
in the Dow Jones industrials index in afternoon trading
at $113.21 on the New York Stock Exchange.
At a meeting it held for analysts and investors, United Tech
said it aims to increase revenue by mid-single-digit percentages
annually, excluding acquisitions, from now until 2020. The
company is targeting revenue rising to $85 billion to as much
$100 billion by 2020, with deals potentially helping the company
reach the high end.
"We have solid programs, solid backlog that is going to
allow us to drive our top-line growth through the end of the
decade and sales will approach $100 billion," Chief Financial
Officer Greg Hayes told the conference, which was held in United
Tech's hometown of Hartford, Connecticut and broadcast over the
"We're going to grow almost two times world GDP over this
period just based on the backlog that we see today," Hayes said.
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. Its
Pratt & Whitney jet engine business is launching a new engine
expected to revitalize its sales on commercial airliners.
The company's Sikorsky helicopter unit has been in focus
since a January report in publication Defense News said United
Technologies was weighing options for Sikorsky, including a
potential sale or spinoff.
When asked at the meeting about Sikorsky, Chief Executive
Officer Louis Chenevert said the company does not comment on
rumors. But he touted opportunities for the maker of Black Hawk
helicopters, including the potential for expanding margins and
"Sikorsky, in my view, is a UTC kind of company," Chenevert
Asked about acquisitions, Hayes said United Technologies
would be more focused on "bigger" deals than smaller, and was
more likely to look for deals to support its commercial
businesses than for aerospace. However, the company, which
struck a roughly $16 billion deal a few years ago for aircraft
components maker Goodrich Corp, is not expected to do anything
big soon, Hayes said.
"I don't see a big deal as I stand here today in the next 18
months," Hayes said.
The company forecast earnings of about $1.25 for the first
quarter, compared to the average analyst estimate of $1.38,
according to Thomson Reuters I/B/E/S. Restructuring costs are
weighing on the first-quarter results, Hayes said.
United Tech backed its previous 2014 forecast of earnings in
a range of $6.55 to $6.85 per share on sales of about $64
billion. Analysts are looking for earnings of $6.82 per share on
sales of $65.1 billion.
United Tech shares are down about 0.5 percent in 2014 after
a strong performance in 2013.