United Technologies Corp. [UTX] yesterday reported a solid increase in its second quarter earnings while posting a double-digit gain in sales due to acquisitions.
Net income rose 6 percent to $1.6 billion, $1.70 earnings per share (EPS), from $1.3 billion ($1.62 EPS) a year ago, beating consensus estimates of $1.58 EPS. Sales increased 16 percent to $16 billion from $13.8 billion, with alls of the gain due to acquisitions as organic revenues were flat.
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| Cutaway by UTC |
UTC’s Pratt & Whitney and Aerospace Systems segments drove the profit gains, more than offsetting declines in the Climate, Control & Security, and Sikorsky segments. Profits at Otis were flat.
The company said that savings from restructuring, strong execution and growing backlog led it to narrow its earnings guidance for the year to the high end of previous expectations. The current outlook is between $6 to $6.15 EPS versus prior projections of $5.85 to $6.15 EPS. Sales on the other hand are expected to come in at the low end of the guidance range, which stands at $64 billion to $65 billion.
UTC is expecting organic growth to resume in the second half of the year, Louis Chenevert, the company’s chairman and CEO, said in a statement.
UTC sold its Rocketdyne rocket motor division to GenCorp [GY] in June, completing its portfolio transformation, Chenevert said.