United Technologies beat estimates by a penny

United Technologies’ (UTX) cost-cutting efforts helped second-quarter profit dropped 23% to $1.05 a share, beating estimates by a penny. As the recession impacts the markets for aerospace and building-construction products, UTX cut its full-year revenue and lowered the top end of profit guidance, but both cuts are in line with analysts’ estimates.

Revenues decreased 17% to $13.2 billion, short of estimates, with revenue at the company’s heating and ventilation-systems business (Carrier) falling 29% on a slide in commercial new-equipment orders. Carrier accounts for about one-fourth of UTX’s annual revenue. The only one of UTX’s business divisions to post sales and profit growth was the Sikorsky helicopter unit.

The company said restructuring costs hurt profits by about 22 cents a share during the quarter. Excluding restructuring costs and a non-cash gain from an Otis joint venture, all of UTX’s segments had operating margins of more than 10%. Currency effects – overseas sales account for about 60% of revenue – reduced profit by 11 cents a share.

CEO Louis Chenevert said orders remain lower than UTX anticipated, but “the rate of decline in orders across the businesses appears to have stabilized.” He added that he saw acquisition opportunities this year, especially in aerospace and the highly fragmented fire-security industry.
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Peter J. Lazaroff