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Tuesday, July 21, 2015

UTC Releases Disappointing Second Quarter Profits

Juliet Van Wagenen

Photo: UTC
Photo: UTC

[Avionics Today 07-21-2015] Following the company’s announcement to sell Sikorsky Aviation to Lockheed Martin for $9 billion, United Technologies Corp. (UTC) reported lackluster second quarter earnings. Sales of $16.3 billion decreased by 5 percent, reflecting the impact of adverse foreign exchange and absence of the prior year Sikorsky Canadian Maritime Helicopter Program adjustment, which were partially offset by the benefit of organic growth and acquisitions in 2015. Adjusted for restructuring costs and net one-time items, segment-operating profit was down 3 percent.

"Through the first half of the year, the businesses delivered 3 percent organic sales growth in what continues to be a slow growth global economy.  This solid growth contributed to a 6 percent increase in EPS on a constant currency basis, excluding the impact of gains and restructuring," said Gregory Hayes, UTC president and chief executive officer. "Continued strength in the U.S. dollar has had a significant adverse impact on our results this year."

Commercial aerospace aftermarket sales were up 1 percent at Pratt & Whitney and flat at UTC Aerospace Systems.  Provisioning and repair sales at UTC Aerospace Systems were down in the quarter, but those declines were partially offset by high single digit growth in spare parts sales.

The company now expects 2015 operating profit at UTC Aerospace Systems to be down $25 to $75 million.

"With six months of trends behind us, it is now clear the commercial aftermarket at UTC Aerospace Systems will be significantly below our expectations for the year," Hayes added. "While this revised forecast is disappointing, we remain confident in our long term outlook for the business.”

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