News Column

UTC Profits Beat Estimates, Helped By Helicopter Delay

January 22, 2014

By Brian Dowling, The Hartford Courant

Jan. 22 -- United Technologies Corp. said Wednesday that profits from continuing operations and a delayed helicopter shipment led to increased per share earnings that beat analyst expectations. Earnings from continuing operations increased 50 percent to $1.6 billion , or $1.58 per diluted share, from $1.0 billion , or 1.05 per share, the year before. The delayed delivery of the unprofitable CH-148 Cyclone Canadian Maritime Helicopters increased earnings by 6 cents a share because the sale of each aircraft accounts for an about $14 million loss through Sikorsky Aircraft. Canada signed the initial contract for 28 helicopters almost a decade ago, but delays and export issues held up the program. As of early January, only four have been delivered to Canada's Air Force base in Shearwater, Nova Scotia . Chief Financial Officer Greg Hayes said that he expects the company to sign a preliminary contract agreement with the Canadian government in March and that Sikorsky should be able to deliver eight aircraft for the next three years to complete the contract. "The customer recognizes the value of the aircraft," Hayes said in a conference call with analysts. "There was talk in the Canadian press about termination and all of that. They need these helicopters. These are the best damn military helicopters out there." Net income, however, fell 29 percent, from $2.1 billion to $1.5 billion , during the fourth quarter last year compared with a year earlier, because of a large gain at the end of 2012 from the industrial manufacturer's $2 billion sale of its Hamilton Sundstrand industrial businesses. Hayes said the Hartford -based company expects to find $350 million in cost savings in 2014, down from last year's end mark of $500 million . Sales of Otis elevators and Pratt & Whitney engines contributed to higher revenues of $16.8 billion , up from $16.4 billion during the fourth quarter of 2013. Hayes said that Pratt's parts business began to see heavier engine overhauls from airline customers. The East Hartford engine manufacturer generally realizes most of the profits on its parts and service business, rather than the original equipment. "The integration of our transformational deals and relentless focus on cost reductions were at the core of another successful year," said chief executive, Louis ChÊnevert, in a prepared statement. For the full year, profits at United Technologies rose to $5.7 billion , or $6.21 per diluted share, from $5.1 billion , or $5.35 per diluted share. Sales rose to $62.6 billion , short of analyst expectations, from $57.7 billion . ___ (c)2014 The Hartford Courant (Hartford, Conn.) Visit The Hartford Courant (Hartford, Conn.) at Distributed by MCT Information Services

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Source: Hartford Courant (CT)

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