(Adds interview with Sikorksy president, byline)
By Andrea Shalal
WASHINGTON, June 18 United Technologies Corp
on Wednesday said its Sikorsky Aircraft unit would
record sales of $850 million and a charge of $440 million in the
second quarter after signing a revamped agreement with Canada
for 28 maritime helicopters.
The amendment to the long delayed multibillion dollar deal
will allow Canada to start retiring its fleet of aging Sea King
helicopters in 2015 and accelerate operations of the new CH-148
Cyclone helicopters, the company said in a statement.
It said the charge would be offset by one-time gains during
the course of 2014, and the company's forecast for earnings per
share in 2014 remained unchanged at $6.65 to $6.85.
"This agreement clears the way for us to deliver the world's
most advanced maritime helicopter capability to the Royal
Canadian Air Force," Sikorsky President Mick Maurer said in a
Public Works and Government Services Canada, which oversees
defense procurements, said the government's budget of C$1.9
billion the helicopters remained unchanged, and it would spend
C$5.7 billion for in-service support of the new fleet through
2038, 10 years longer than planned.
"I am pleased that this contract has now been completed and
that we can fulfill our government's commitment to begin to
retire the Sea Kings in 2015, and deliver a new and leading
maritime helicopter to the Royal Canadian Air Force," said Diane
Finley, minister of public works and government services.
Canada announced in September that it might scrap the deal
and consider other options, but the two sides reached agreement
in late December on how to revamp the contract.
On Wednesday, Canada said Hitachi Consulting, an independent
group that reviewed and verified the new contract structure,
would continue to oversee aspects of the implementation plan,
ensuring that delivery times remain as promised.
Maurer told Reuters in a telephone interview that the deal
removed a cloud of uncertainty that had been hanging over the
program and could revive interest from other countries in the
new helicopters, which are based on Sikorsky's S-92 helicopter.
He said he expected interest to pick up once Canada began
operating the new advanced helicopters, which can be used for a
variety of missions, including hunting enemy submarines.
Canada is already using four helicopters to train pilots and
technicians. At least six more helicopters would be delivered as
part of an initial block by the middle of 2015, Maurer said.
By the middle of 2018, Sikorsky would deliver at least six
more helicopters with further mission and software capabilities,
as well as improved components that would reduce operating
Maurer said the new contract adopted a more phased approach
for introduction of the new helicopters, a change from how the
program was initially structured.
"What we're going to be able to do it give them incremental
improvement, with one block in 2015 and a second block in 2018
that gives them full capability over time," he said.
(Additional reporting by Randall Palmer in Ottawa; Editing by
Andre Grenon and Cynthia Osterman)