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HARTFORD, Conn. – United Technologies Corp. (NYSE:UTX) today reported first quarter 2009 earnings per share of $0.78 and net income attributable to common shareowners of $722 million, down 24 percent and 28 percent, respectively, over the year ago first quarter. Revenues for the quarter at $12.2 billion were 12 percent below prior year reflecting adverse foreign currency translation (6 points), organic decline (5 points), and net divestitures (1 point).
This quarter’s results include $0.12 per share in restructuring costs and $0.03 per share from a one time tax benefit. Earnings per share in the year ago quarter included $0.02 in restructuring costs. Before these items, earnings per share declined 17 percent year over year. Adverse foreign currency translation and currency hedges at Pratt & Whitney Canada totaled $0.08 in the first quarter of 2009.
“Market conditions and UTC’s operating performance were consistent with expectations reviewed with investors at UTC’s March 12 meeting,” said Louis Chênevert, UTC President and Chief Executive Officer. “We continue to execute well in the face of difficult end markets and currency headwinds. A relentless focus on cost reductions across the businesses limited the impact on profits from a $1.7 billion decline in revenues, with 80 basis points of operating margin expansion at Otis and 70 basis points each at UTC Fire & Security and Sikorsky, all before restructuring costs.”
New equipment orders at Otis declined 43 percent over the year ago first quarter, including 6 points from the stronger dollar. On the same basis, Carrier’s Commercial HVAC new equipment orders were down 24 percent (foreign exchange 7 points). Commercial spares orders were down 28 percent at Pratt & Whitney’s large engine business and down 26 percent at Hamilton Sundstrand.
“As anticipated, order trends were weak in the quarter although we saw stabilization in the rate of year-over-year decline across most of our businesses in March,” Chênevert added. “We remain on track to meet the full year revenue and earnings guidance for UTC overall despite the tough economic environment. Revenues for 2009 are expected at $55 billion with earnings per share in the range of $4.00 to $4.50, down 8 percent to 18 percent over the prior year, excluding the impact of acquisition related costs resulting from the application of SFAS 141(R).
“We’re executing aggressively on the $750 million restructuring program for 2009 announced last month and initiated $163 million of actions in the first quarter,” Chênevert continued. “The associated cost reductions will allow UTC to outperform even in this environment and position us to resume earnings growth in 2010.”
Cash flow from operations was $485 million and capital expenditures were $167 million for the quarter. Share repurchase totaled $200 million and acquisition spending was $122 million.
“Cash flow from operations less capital expenditures was below net income attributable to common shareowners for the quarter reflecting normal Carrier seasonality and higher working capital at Sikorsky and Pratt & Whitney. Capital expenditures were 30 percent below the year ago quarter,” Chênevert added. “We continue to expect cash flow from operations less capital expenditures to meet or exceed net income attributable to common shareowners for the year.”
The accompanying tables include information integral to assessing the company’s financial position, operating performance, and cash flow.
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.
This release includes "forward looking statements" concerning expected revenue, earnings, cash flow, share repurchases, restructuring; anticipated benefits of UTC’s diversification, cost reduction efforts and business model; and other matters that are subject to risks and uncertainties. These statements often contain words such as “expect”, “anticipate”, “plan”, “estimate”, “believe”, “will”, “should”, “see”, “guidance” and similar terms. Important factors that could cause actual results to differ materially from those anticipated or implied in forward looking statements include further deterioration or extended weakness in global economic conditions; further tightening or extended contraction in credit conditions; the impact of volatility and deterioration in financial markets on overall levels of economic activity; declines in end market demand in construction and in both the commercial and defense segments of the aerospace industry; fluctuation in commodity prices, interest rates, foreign currency exchange rates, and the impact of weather conditions; and company specific items including the impact of financial market volatility and deterioration on the financial strength of customers and suppliers and on levels of air travel; the availability and impact of acquisitions; the rate and ability to effectively integrate these acquired businesses; the ability to achieve cost reductions at planned levels; challenges in the design, development, production and support of advanced technologies and new products and services; delays and disruption in delivery of materials and services from suppliers; labor disputes; and the outcome of legal proceedings. The level of share repurchases may vary depending on the level of other investing activities. For information identifying other important economic, political, regulatory, legal, technological, competitive and other uncertainties, see UTC's SEC filings as submitted from time to time, including but not limited to, the information included in UTC's 10-K and 10-Q Reports under the headings "Business", "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Cautionary Note Concerning Factors that May Affect Future Results", as well as the information included in UTC's Current Reports on Form 8-K.