UTC REPORTS

UTC REPORTS SECOND QUARTER 2014 RESULTS

 

·         EPS of $1.84, up 8% (up 12% ex. restructuring and one-time items)

·         Sales of $17.2 billion, including 3% organic growth

·         Increases lower end of 2014 EPS range, now expects EPS of $6.75 to $6.85

HARTFORD, Conn., July 22, 2014 – United Technologies Corp. (NYSE:UTX) reported second quarter earnings per share of $1.84 and net income attributable to common shareowners of $1.7 billion, both up 8 percent over the year ago quarter.  Restructuring costs were offset by other net favorable one-time items, which include the Canadian Maritime Helicopter Program (CMHP) charge in the current quarter.  Earnings per share in the year ago quarter included $0.05 of favorable one-time items net of restructuring costs.  Excluding these items in both quarters, earnings per share increased 12 percent year over year.

Sales of $17.2 billion increased 7 percent, reflecting the benefit of organic growth (3 points) and a cumulative adjustment for the CMHP (5 points) partially offset by net divestitures (1 point).  Second quarter segment operating profit decreased 15 percent over the prior year quarter, including the CMHP adjustment.  Excluding restructuring costs and net one-time items, segment operating profit grew 8 percent with 90 basis points of operating margin expansion.

“Our focus on growth opportunities and execution in our core markets resulted in another solid quarter,” said Louis Chênevert, UTC Chairman & Chief Executive Officer.  “We saw a fourth consecutive quarter of organic sales growth, along with strong margin expansion.”

Otis new equipment orders increased 3 percent over the year ago second quarter at constant currency, led by 44 percent growth in North America.  Equipment orders at UTC Climate, Controls & Security increased 2 percent organically.  Large commercial engine spares orders were down 6 percent at Pratt & Whitney and commercial spares orders increased 28 percent at UTC Aerospace Systems.

“With earnings up 11 percent, excluding the impact of restructuring and one-time items, UTC delivered a strong first half of the year,” said Chênevert. “Our solid backlogs, organic growth trends, and focus on execution give us confidence to increase the lower end of our earnings per share range.  We now expect earnings per share of $6.75 to $6.85, up from $6.65 to $6.85 previously.”

Cash flow from operations was $1.7 billion and capital expenditures were $406 million in the quarter.  Share repurchase was $335 million.  As a result of increased working capital investment to support the aerospace upcycle, the company now anticipates 2014 cash flow from operations less capital expenditures to range from 90 to 100 percent of net income attributable to common shareowners.  In addition, UTC now expects share repurchase of $1.25 billion and acquisitions of less than $1 billion for the year, from the previous expectation of $1 billion each.           

United Technologies Corp., based in Hartford, Connecticut, provides 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 press release includes statements that constitute “forward-looking statements” under the securities laws. Forward-looking statements often contain words such as “believe,” “expect,” “plans,” “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, share repurchases 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 funding; weather conditions and natural disasters; delays and disruption in delivery of materials and services from suppliers; company and customer directed cost reduction efforts and restructuring costs and consequences thereof; the impact of acquisitions, dispositions, joint ventures and similar transactions; the development and production of new products and services; the impact of diversification across product lines, regions and industries; the outcome of legal proceedings, investigations and other contingencies; pension plan assumptions and future contributions; the effect of changes in tax, environmental and other laws and regulations and political conditions; and other factors beyond our control. The level of share repurchases depends upon 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 press release and we undertake no obligation to update or revise any forward-looking statements as of a later date. For additional information identifying factors that may cause actual results to vary materially from those stated in 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.

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