Jan 27 Diversified manufacturer United
Technologies Corp is weighing options for its Sikorsky
helicopter unit, including a potential sale or spinoff, industry
publication Defense News reported on Monday, citing unnamed
United Technologies shares were up 2 percent in afternoon
trading, against relatively flat U.S. markets.
According to the report, Sikorsky, which manufactures the
Black Hawk military helicopter, among others, could be a target
for European companies seeking to enter the U.S. market.
A United Technologies spokesman said the company does not
comment on market rumors.
In its fourth-quarter earnings report last week, United
Technologies said Sikorsky totaled $6.25 billion in revenue for
2013, a decline of 7.9 percent, while operating profit fell more
than 16 percent to $594 million.
Sikorsky accounted for about 10 percent of United
Technologies' overall revenue of $62.6 billion last year.
Peter Arment, an analyst with Sterne Agee, said that while
U.S. military budgets for helicopters ballooned during the Iraq
and Afghan wars, "going forward, helicopter budgets are
resetting ... which will limit the growth of the helicopter
industry for several years."
Valuations for defense companies trail United Tech's other
businesses, he added.
United Technologies is a major player in parts of the
aerospace industry as well as a big manufacturer of elevators
and climate control systems.
"We would view a spinoff of Sikorsky as positive and could
unlock substantial value for UTX given it removes the lowest
multiple portion of the company," Arment said in a research
UTX shares rose 2.1 percent to $114.19 in afternoon trading
on the New York Stock Exchange.