HARTFORD (dpa-AFX) - Diversified conglomerate United Technologies Corp. (UTX) reported Tuesday a profit for the first quarter that decreased four percent from last year, despite revenue growth, reflecting higher income tax expense.
Earnings per share from continuing operations and quarterly revenues topped analysts' expectations. The company also raised its earnings guidance for full-year 2014, while maintaining annual revenue outlook.
'UTC delivered strong results to start the year with continued momentum coming out of 2013. All five of the segments contributed to UTC's organic sales growth in the quarter. Our focus on growth and execution is paying off as we capitalize on improving end markets,' Chairman and CEO Louis Chenevert said.
The Hartford, Connecticut-based parent company of jet engine manufacturer Pratt & Whitney, Otis elevator, and Sikorsky aircraft reported net income of $1.21 billion for the first quarter, 4 percent lower than $1.27 billion in the prior-year quarter.
Net income from continuing operations decreased 5 percent to $1.32 per share from $1.39 per share in the year-ago quarter.
Results for the latest quarter include $0.09 of restructuring charges, while the prior-year quarter included $0.11 of favorable one-time items net of restructuring costs. Excluding these items, adjusted earnings per share from continuing operations increased 10 percent year-over-year.
On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $1.27 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter edged up 2 percent to $14.75 billion from $14.40 billion in the same quarter last year, and topped eighteen Wall Street analysts' consensus estimate of $14.74 billion by a whisker.
Sales growth reflect the benefit of organic sales growth (5 percentage points) partially offset by net divestitures (2 percentage points) and adverse foreign exchange (1 percentage point).
The company's segment operating profit margin improved 10 basis points to 14.5 percent from last year.
New equipment orders at Otis were up 9 percent, and UTC climate, controls & security equipment orders grew 1 percent organically from last year.
Large commercial engine spares orders rose 11 percent at Pratt & Whitney, and commercial spares orders also increased 9 percent at UTC Aerospace Systems.
Income tax expense for the quarter grew to $567 million from $418 million in the year-ago quarter.
'Continued organic growth and orders strength give us confidence in our sales expectation of $64 billion for 2014. Based on visibility to additional restructuring projects with solid returns, we now plan to increase restructuring spending from $300 million to $375 million, which we expect to be offset by one-time gains. The sales outlook together with continued cost reduction positions us to increase the lower end of our earnings per share range,' Chenevert added.
Looking ahead to full year 2014, the company raised its earnings guidance to a range of $6.65 to $6.85 per share from the prior forecast of $6.55 to $6.85 per share, while continuing to expect annual sales of about $64 billion. Street is currently looking for full-year 2014 earnings of $6.83 per share on annual revenues of $65.17 billion.
UTX closed Monday's regular trading session at $118.30, down $0.38 on a volume of 2.69 million shares. In the past 52-week period, the stock has been trading in a range of $90.30 to $120.49.
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