United Technologies tops 1Q net income expectations, misses revenue forecasts

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HARTFORD, Connecticut — First-quarter profit jumped 18 percent at United Technologies Corp., as the industrial and building systems conglomerate reported strong order increases at elevator maker Otis and in equipment orders at the heating, cooling and security unit.

Revenue fell slightly, weighed down by the strong dollar and declining sales at helicopter manufacturer Sikorsky.

First-quarter net income was $1.43 billion, or $1.58 per share. Adjusted for restructuring gains, earnings were $1.51 per share.

The results announced Tuesday surpassed Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was $1.44 per share.

The Hartford, Connecticut, manufacturer of elevators, jet engines, heating and cooling systems and other products posted revenue of $14.54 billion, which fell short of forecasts. Eight analysts surveyed by Zacks expected $14.96 billion.

Revenue declined 1 percent, reflecting the strong dollar that's making exports more expensive and a 7 percent decline in revenue, to $1.27 billion at helicopter maker Sikorsky.

United Technologies said the reduced Sikorsky revenue was due to the fall in oil prices that's led to a cutback in helicopter business shuttling workers to offshore oil platforms. Sikorsky also manufactures the Black Hawk and Seahawk helicopters for the military and the president's Marine One and commercial helicopters.

The conglomerate is considering spinning off Sikorsky, which CEO Greg Hayes said could net $7 billion.

Edward Jones analyst Matt Arnold said United Technologies maintained its guidance despite the pressure on results due to the strong dollar.

"They performed strongly enough in their business to offset that and still hit their numbers," he said. "They're delivering profit growth with no reported revenue growth."

In contrast, companies as diverse as the DuPont Co. and Royal Caribbean Cruises Ltd. have cited the strong dollar as they pared guidance, citing the strong dollar.

Hayes said United Technologies could cut its guidance if the euro slides to parity with the U.S. dollar. The euro traded at $1.07 on Tuesday.

United Technologies expects full-year earnings at $6.85 to $7.05 per share, with revenue in the range of $65 billion to $66 billion.

Its shares rose 24 cents to $116.75 in midday trading Tuesday. Shares have climbed slightly more than 1 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed 2 percent. The stock has decreased 1.3 percent in the last 12 months.

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