United Tech Profit Rises but Europe, Aerospace Drag
United Technologies reported first-quarter earnings on Tuesday that exceeded Wall Street's expectations, yet revenue was partly undermined by a weak European market and soft commercial aerospace and defense sales.
The Hartford, Connecticut-based conglomerate saw earnings per share jump to $1.39 a share, up from $1.31 a share in the year-earlier period. Profit was boosted by one-time favorable items, United Tech said.
Revenue rose to $14.4 billion from $12.42 billion a year ago. The company cited a two percent drop in organic sales, spurred largely by Europe's weak economy, and defense cuts that hit its Sikorsky unit -- a measure of how U.S. spending cuts may be curtailing defense spending.
Analysts had expected the company to report earnings excluding items of $1.29 a share on $14.94 billion in revenue, according to a consensus estimate from Thomson Reuters.
United Tech recently completed an $18.4 billion purchase of Goodrich, and it's Pratt & Whitney unit paid $1.5 billion to buy out Rolls-Royce's share of IAE, an aircraft-engine venture. In a statement, the conglomerate said both purchases were " exceeding our expectations and creating new opportunities for long term organic growth."
Large commercial engine spares orders were up 14 percent at Pratt & Whitney, which included the benefit from the IAE acquisition, the company added.
"Macroeconomic indicators coupled with order improvement in our commercial businesses point towards a gradual resumption of organic growth during the course of the year," said Louis Chenevert, United Tech's chairman & CEO. Chenevert added, "Our ongoing focus on cost reduction provides strong operating leverage and we continue to expect 2013 earnings per share of $5.85 to $6.15 on sales of $64 to $65 billion."
In pre-market trading, United Tech's stock rose modestly. (Click here for the latest before-hours quote.)