By Lewis Krauskopf
Dec 12 United Technologies Corp, the
world's largest maker of elevators and air conditioners, on
Thursday projected earnings to rise 7 percent to 11 percent next
year, barely meeting analysts' targets, and gave a revenue view
that fell short of Wall Street expectations.
The diversified U.S. manufacturer, which also makes Pratt &
Whitney jet engines and Black Hawk helicopters, is being weighed
down by its defense business, while sales are expected to be
strong next year for its Otis elevators branch.
United Technologies said it expects earnings in a range of
$6.55 to $6.85 per share for next year. Analysts on average were
looking for earnings of $6.84 per share, according to Thomson
The company said it expected 2013 earnings of about $6.15
per share, the high end of its earlier forecast which translates
to growth of about 15 percent.
The company forecast revenue of about $64 billion next year.
Analysts were looking for about $66.3 billion.
At a meeting for analysts in New York, United Technologies
Chief Executive Louis Chenevert pointed to its building and
industrial systems business, which includes Otis elevators, and
its aerospace unit as profit drivers next year.
The company is benefiting from two global trends, Chenevert
said, urbanization and growth in commercial flight. For example,
developing markets "spend a fraction of the developed markets"
on air conditioning products such as those sold by the company.
"We're well positioned to take advantage of the two
megatrends," Chenevert said.
Chenevert predicted "modest" improvement in the global
economy next year. He said there were "signs of stability" in
"Europe has bottomed out," Chenevert said.
Uncertainty over the U.S. government sequestration program,
which involves spending cuts on federal projects, has hurt the
company's military business, which accounts for about 18 percent
For example, spare part orders at its Sikorsky unit, which
produces Black Hawks, have been way down, the company said
during its third-quarter report.
Chenevert said the defense area remains "under pressure,"
but that the situation could improve with a U.S. budget deal.
"Looks like sequestration could be less of an impact next
year," he told reporters after the meeting.
The company also said it was setting aside about $1 billion
each next year for share repurchases and acquisitions.
Chenevert told reporters he expected only small transactions
next year. "At this point in time, I don't see us in '14 doing
anything of size," the CEO said.
The company expects to spend $2 billion on capital
expenditures next year, more than twice the level of recent
years, as it spends on equipment for future aerospace
Through Thursday's trading, before the company released its
forecasts, United Technologies shares had climbed some 32
percent this year, outpacing the broader market.