United Tech sees sales rising with Goodrich buy
HARTFORD, Conn. (AP) — United Technologies Corp. said Thursday that the addition of aircraft-parts maker Goodrich Corp. will help it overcome Europe's weak economy and reduced U.S. defense spending next year.
At its annual outlook meeting, the parent of jet-engine maker Pratt & Whitney, Otis elevator and other companies said it expects revenue next year to be between $64 billion and $65 billion. That's short of what Wall Street expects but still more than 10 percent higher than 2012 revenue, which is expected to be $58 billion.
CEO Louis Chenevert credited the Hartford, Conn., company's $18.4 billion purchase — its biggest ever — of Goodrich for propelling revenue growth.
"In 2013, UTC's reshaped portfolio will be well-positioned for accelerated top-line growth," he said.
Chenevert repeated the company's pledge to resume share repurchases in 2013, spending $1 billion after suspending buybacks in September 2011 to focus on the Goodrich deal. But he hinted that could double eventually.
"One could say that we've done certainly $2 billion or around $2 billion repeatedly. I would say that that's probably a proper expectation," he said.
He said he continues to look for companies to buy but doesn't see "anything big on the horizon."
United Technologies tightened its 2012 profit outlook to $5.32 per share, from a previous range of $5.25 to $5.35, matching Wall Street expectations. It expects to make $5.85 to $6.15 per share next year. Analysts expect $6.15 per share on revenue of $66.13 billion, according to FactSet.
Edward Jones analyst Christian Mayes said revenue growth will be driven by rising demand in the commercial-airline industry, which is buying planes and energy-efficient engines, and recovery in United Technologies' building systems companies, Otis elevator and Carrier heating, ventilating and air conditioning.
Otis is expected to increase its elevator service work and benefit from a strengthening housing market in China, Mayes said.
"It's poised for a comeback next year," he said.
But United Technologies also is preparing for military-spending cuts as the U.S. winds down operations in Afghanistan and the Obama administration looks to the Pentagon to slice into the federal deficit. Pratt & Whitney announced last week it is cutting about 100 workers through layoffs and buyouts due to falling demand for repair work and the completion of a program to build engines for the F-22 fighter.
Chenevert said the main focus next year is for United Technologies to digest the Goodrich purchase. So far, it's working out, he said.
"All the signs are there that this is going to be a perfect marriage for years to come," he said.