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HARTFORD, Conn. – United Technologies Corp. (NYSE:UTX) today reported first quarter 2010 earnings per share of $0.93, up $0.15 or 19 percent over the year ago first quarter. Results for the current quarter include $0.05 per share in restructuring costs. Earnings per share in the year ago quarter included $0.09 in restructuring costs net of a one time gain. Before these items, earnings per share increased 13 percent year over year. Foreign currency translation and currency hedges at Pratt & Whitney Canada accounted for $0.06 of the earnings per share increase.
Revenues of $12.1 billion for the quarter were 1 percent below prior year reflecting organic decline (4 points), mostly offset by favorable foreign currency translation (3 points). Segment operating margin at 13.6 percent was 250 basis points higher than prior year. Adjusted for restructuring costs, segment operating margin was 180 basis points higher than prior year. Net income attributable to common shareowners for the quarter increased 20 percent to $866 million. Cash flow from operations was $1.15 billion and, after capital expenditures of $147 million, exceeded net income attributable to common shareowners.
“Continued focus on cost reduction and productivity, as well as savings from restructuring actions, led to margin expansion across each of our businesses,” said Louis Chênevert, UTC Chairman & Chief Executive Officer. “Early and aggressive actions taken by the business units over the past 18 months have made UTC stronger, leaner, and well positioned to outperform as the global economy continues to recover.”
New equipment orders at Otis were up 9 percent over the year ago first quarter, including 6 points from the weaker dollar. Carrier’s Transicold orders were up 37 percent (excluding favorable foreign exchange 4 points) while Commercial HVAC new equipment orders were down 4 percent (excluding favorable foreign exchange 6 points). Commercial spares book to bill at both Pratt & Whitney’s large engine business and Hamilton Sundstrand was above 1.0.
“In addition to strong cost traction, we are seeing broader improvement in order trends, especially in the emerging markets. These order trends give us confidence organic growth will resume in the second half of this year. Accordingly, we are raising the lower end of the earnings per share guidance to $4.50 from $4.40. We now expect 2010 EPS in the range of $4.50 to $4.65, up 9 to 13 percent on revenues of $54 billion to $55 billion,” Chênevert added. This range continues to include $350 million of expected restructuring charges and one time gains of $100 million.
“Cash generation remains strong, driven by continued focus on working capital and control over capital expenditures. We expect UTC’s cash flow from operations less capital expenditures to meet or exceed net income attributable to common shareowners for the year,” Chênevert continued.
Share repurchase in the quarter was $500 million and acquisition spending was $2.1 billion, including GE Security and Clipper Windpower. Full year guidance remains unchanged for both share repurchase and acquisitions at $1.5 billion and $3 billion, respectively.
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 uncertainties that could cause actual results to differ materially from those anticipated or implied in forward looking statements include the severity and duration of global recessionary conditions, including 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 further deterioration and extended weakness in global economic conditions on demand for our products and services, the financial strength of customers and suppliers and on levels of air travel; financial difficulties, including bankruptcy, of commercial airlines; 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.