United Tech beats on profit, raises 2018 forecasts
(Reuters) - United Technologies Corp’s (UTX.N) topped analysts’ estimate with quarterly results on Tuesday and raised its full year forecasts higher, citing higher demand for spare parts and services from airlines dealing with booming passenger travel.
FILE PHOTO: United Technologies logo is displayed on a screen at the post where it's stock is traded on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 5, 2017. REUTERS/Brendan McDermid/File Photo
The company’s chief financial officer also told Reuters that United Tech expects to meet its full-year target for engine deliveries to Airbus SE (AIR.PA) and is optimistic that its suppliers can keep pace with rising engine production.
Shares of the maker of Otis Elevators, Pratt & Whitney aircraft engines and Carrier air conditioners were up 1.7 percent at $125.50 in premarket trading.
The company’s Pratt & Whitney unit halted deliveries of its Geared Turbofan engine for the Airbus A320neo for almost a month earlier this year, but the issues are coming under control and “we feel very good about the supply chain and our ability to support Airbus requirements,” CFO Akhil Johri said.
Booming air travel drove record sales of commercial aircraft last year, putting pressure on supplies of the fuel-saving turbofan engines that United Tech makes for both Airbus’ new A320neo, and Bombardier’s (BBDb.TO) CSeries aircraft.
Related Coverage United Tech expects to meet rising Airbus production schedule
The company said sales in its Pratt & Whitney unit, which also makes the F135 engine for Lockheed Martin Corp’s (LMT.N) F-35 fighters, rose 15.2 percent to $4.33 billion in the first quarter ended March 31, while margins were flat at 9.5 percent.
Sales in the company’s aerospace systems division, which makes engine components and provides spare parts, overhaul and repair services, increased 5.7 percent to $3.82 billion, while margins were up 15.4 percent, from 14.7 percent, a year earlier.
The Farmington, Connecticut-based company forecast 2018 adjusted earnings per share in a range of $6.95-7.15, up from $6.85-$7.10 previously.
The company said it now expects full-year sales of $63 billion to $64.5 billion, up from $62.5 billion to $64.0 billion.
“Investors are apt to be positive to the first quarter’s ops beat and (the) early hike to 2018 outlook,” Cowen & Co analyst Cai von Rumohr wrote in a note.
The company’s net income attributable to shareholders dipped to $1.30 billion from $1.39 billion a year ago, although that included a one-time gain of $379 million from the sale of its interest in air conditioning and heating equipment maker Watsco.
On a per share basis, net income attributable to shareholders was $1.62 per share in the latest reported quarter. On an adjusted basis, the company earned $1.77 per share.
Net sales rose to $15.24 billion from $13.82 billion.
Analysts on average had expected earnings of $1.52 per share and revenue of $14.64 billion, according to Thomson Reuters I/B/E/S.