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UTC Reports Third Quarter Earnings Per Share Growth Of 13 Percent To $1.55; Increases Lower End Of 2013 EPS Range And Now Expects EPS Of $6.10 To $6.15, Up 14 To 15 Percent

Oct 22, 2013

HARTFORD, Conn. – United Technologies Corp. (NYSE:UTX) reported third quarter earnings per share of $1.55 and net income attributable to common shareowners of $1.4 billion, both up 13 percent over the year ago quarter. Results for the current quarter included $0.08 per share of restructuring costs. Favorable one-time items offset restructuring costs in the year ago quarter. Before these items, earnings per share increased 19 percent year over year.

Sales for the quarter of $15.5 billion were 3 percent above prior year reflecting the benefit of net acquisitions (2 points) and organic growth (1 point). Third quarter segment operating profit increased 14 percent over the prior year quarter, and segment operating margins were 15.8 percent. Adjusted for restructuring costs and net one-time items, segment operating profit also grew 14 percent, with segment operating margins of 16.6 percent.

“UTC delivered 13 percent earnings growth on strong operating performance. Our solid year to date results, additional restructuring savings, and improving sales trends give us confidence to increase the lower end of our earnings per share range. We now expect 2013 earnings per share of $6.10 to $6.15, growth of 14 to 15 percent, up from $6.00 to $6.15 previously,” said Louis Chênevert, UTC Chairman & Chief Executive Officer.

New equipment orders at Otis increased 4 percent over the year ago third quarter. UTC Climate, Controls & Security equipment orders increased 13 percent organically. Large commercial engine spares orders were up 17 percent at Pratt & Whitney. On a pro-forma basis, adjusted to include Goodrich in both years, commercial spares orders increased 5 percent at UTC Aerospace Systems.

“With sustained order growth momentum in a majority of our markets this quarter, we continue to expect organic growth to accelerate as we exit the year. However, with the ongoing weakness in military aerospace markets and slow pace of recovery in Europe, we now expect full year sales of approximately $63 billion, from our previous estimate of $64 billion,” Chênevert said.

UTC expects to invest $500 million in restructuring for 2013 and continues to anticipate restructuring expenses will be offset by one-time items.

Cash flow from operations was $1.5 billion and capital expenditures were $383 million in the quarter. Share repurchase and acquisition spending were $330 million and $54 million, respectively. The company anticipates cash flow from operations less capital expenditures to essentially equal net income attributable to common shareowners for the year.

“The creation of UTC Building and Industrial Systems better positions UTC to capture growth opportunities as urbanization in emerging markets continues to be a powerful megatrend,” Chênevert added. “This new organization will allow UTC to leverage our unmatched capabilities and scale in the building segment.”

On Oct. 9, 2013, UTC’s Board of Directors declared an increase in its fourth quarter dividend to 59 cents per common share. The dividend will be payable Dec. 10 to shareowners of record at the close of business Nov. 15.

United Technologies Corp., based in Hartford, Conn., is a diversified company providing high technology products and services to the building and aerospace industries. Additional information, including a webcast, is available at http://www.utc.com. To learn more about UTC, visit the website or follow the company on Twitter: @UTC.

All financial results and projections reflect continuing operations unless otherwise noted. The accompanying tables include information integral to assessing the company’s financial position, operating performance, and cash flow, including a reconciliation of differences between non-GAAP measures used in this release and the comparable financial measures calculated in accordance with generally accepted accounting principles in the United States.

This release includes statements that constitute “forward-looking statements” under the securities laws. Forward-looking statements often contain words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “estimate,” “project,” “target,” “anticipate,” “will,” “should,” “see,” “guidance,” “confident” and similar terms. Forward-looking statements may include, among other things, statements relating to future and estimated sales, earnings, cash flow, charges, expenditures, anticipated benefits of acquisitions and divestitures, results of operations, share repurchases, uses of cash and other measures of financial performance. All forward-looking statements involve risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. Risks and uncertainties include, without limitation, the effect of economic conditions in the markets in which we operate, including financial market conditions, fluctuation in commodity prices, interest rates and foreign currency exchange rates; future levels of research and development spending; levels of end market demand in construction and in the aerospace industry; levels of air travel; financial difficulties of commercial airlines; the impact of government budget and funding decisions on the economy; changes in government procurement priorities and availability of funding; the impact of weather conditions and natural disasters; the financial condition of our customers and suppliers; delays and disruption in delivery of materials and services from suppliers; cost reduction efforts and restructuring costs and savings and other consequences thereof; the scope, nature, timing or impact of acquisitions, dispositions, joint ventures and other business arrangements, including integration of acquired businesses; the timing and impact of anticipated debt reduction actions; the development and production of new products and services; the anticipated benefits of diversification and balance of operations across product lines, regions and industries; the impact of the negotiation of collective bargaining agreements and labor disputes; the outcome of legal proceedings and other contingencies; future availability of credit; pension plan assumptions and future contributions; and the effect of changes in tax, environmental and other laws and regulations, political conditions in countries in which we operate and other factors beyond our control. The timing and amount of share repurchases depends upon UTC’s evaluation of market conditions and the level of other investing activities and uses of cash. The forward-looking statements speak only as of the date of this release and we undertake no obligation to update or revise any forward-looking statements after the date of this release. For additional information identifying factors that may cause actual results to vary materially from those stated in the forward-looking statements, see our reports on Forms 10-K, 10-Q and 8-K filed with the SEC from time to time, including, but not limited to, the information included in UTC's Forms 10-K and 10-Q under the headings “Business,” “Risk Factors,” “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Legal Proceedings” and in the notes to the financial statements included in UTC's Forms 10-K and 10-Q.

Financial Tables (PDF)