HARTFORD, Conn. – United Technologies Corp. (NYSE:UTX) reported first quarter earnings per share of $1.39 and net income attributable to common shareowners of $1.3 billion, up 6 percent and 7 percent, respectively, over the year ago quarter. Results for the current quarter include $0.11 per share of favorable one-time items net of restructuring costs. Earnings per share in the year ago quarter included a $0.21 benefit from one-time items net of restructuring costs. Before these items, earnings per share increased 16 percent year over year. Net foreign currency translation and hedges at Pratt & Whitney Canada had an adverse impact of $0.01 in the quarter.
Sales for the quarter of $14.4 billion were 16 percent above prior year driven by the benefit of net acquisitions. Organic sales decreased 2 percent from the year ago quarter reflecting ongoing weakness in both Europe and the commercial aerospace aftermarket, and the impact of defense cuts at Sikorsky. First quarter segment operating profit increased 14 percent over the prior year quarter. Adjusted for restructuring costs and net one-time items, segment operating profit grew 15 percent.
“Our focus on integration and execution led to solid performance as we continue to build momentum,” said Louis Chênevert, UTC Chairman & Chief Executive Officer. “The Goodrich and IAE acquisitions are exceeding our expectations and creating new opportunities for long term organic growth.”
New equipment orders at Otis increased 24 percent over the year ago first quarter, led by 29 percent growth in China. Foreign currency had a 2 point favorable impact in China. UTC Climate, Controls & Security equipment orders increased 5 percent organically. Large commercial engine spares orders were up 14 percent at Pratt & Whitney including the benefit from the incremental International Aero Engines share. Organically, commercial spares orders were down 28 percent at Pratt & Whitney. On a pro-forma basis, adjusted to include Goodrich in both years, commercial spares orders increased 2 percent at UTC Aerospace Systems.
“Macroeconomic indicators coupled with order improvement in our commercial businesses point towards a gradual resumption of organic growth during the course of the year,” Chênevert 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.”
Cash flow from operations was $1.4 billion and capital expenditures were $295 million in the quarter. Share repurchase was $335 million and UTC continues to anticipate share repurchase and acquisitions of $1 billion each in 2013. The company continues to expect cash flow from operations less capital expenditures to meet or exceed net income attributable to common shareowners for the year.
“We started our share repurchase program and closed additional divestitures this quarter in accordance with our plan,” Chênevert said. “Our strong cash position will allow us to pay down $2 billion of debt in 2013, up from our prior estimate of $1 billion, as we execute our deleveraging strategy.”
United Technologies Corp., based in Hartford, Connecticut, is a diversified company providing high technology products and services to the building and aerospace industries. Additional information, including a webcast, is available on the Internet 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; 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 amount of gains, losses, impairments and charges related to anticipated dispositions; the timing and impact of anticipated debt reduction following the Goodrich acquisition; 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 completion of the proposed divestitures of businesses is subject to uncertainties, including the ability to secure regulatory approvals on acceptable terms, and satisfaction of other customary conditions. 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.