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United Tech revenue and profit top estimates, shares rise

An attendee looks at an aircraft engine from Pratt & Whitney, a unit of United Technologies, on display during the China International Aviation & Aerospace Exhibition in Zhuhai, China.
Brent Lewin | Bloomberg | Getty Images
An attendee looks at an aircraft engine from Pratt & Whitney, a unit of United Technologies, on display during the China International Aviation & Aerospace Exhibition in Zhuhai, China.

United Technologies Corp's quarterly profit and revenue beat analysts' estimates, and the company raised the low end of its full-year forecast.

The maker of Pratt & Whitney aircraft engines, airplane components,heating and ventilation systems, elevators and other equipment on Tuesday reported adjusted earnings per share of $1.82 for the second quarter, beating the $1.68 that analysts had expected, according to Thomson Reuters.

Revenue rose 1 percent to $14.87 billion, topping analysts' estimates of $14.7 billion.

United Tech's shares rose to $106.80 in premarket trading, up from$104.65.

United Tech raised the low end of its full-year earnings forecast to $6.45 a share, from $6.30, while keeping the high end at $6.60.

It raised the low end of its revenue forecast to $57 billion, from $56 billion, while keeping the upper end at $58 billion.

Sales of engines and aerospace components rose in the quarter, while sales of elevators, climate controls and security systems were flat, in part due to currency effects.

Pratt saw a 20-percent rise in aftermarket sales, as V2500 engines began reaching the age when they need to be overhauled, a trend expected to continue for years.

But Pratt's profits fell, which implied rising costs to ramp up production of the new Geared Turbofan engine kicked in, said Howard Rubel, an analyst at Jefferies.

A 4-percent rise in sales at the Otis elevator division was offset by foreign exchange, Chief Executive Greg Hayes said in an interview.

For the full year, global instability and currency shifts remain risks, Hayes said, though he said the company has not increased currency hedges.

"Clearly everybody's worried about the elections here in the U.S., but there's not much impact for the year as far as I can tell," he said. "Longer-term, that may be a different story. But really it's just global uncertainty, it's what's going on in the marketplace, it's the global war on terror, all of those things can be disruptive. Although it's nice to have a long cycle business with a big backlog."

Net income fell to $1.37 billion from $1.54 billion a year earlier, including restructuring costs.