United Technologies Corp. reported first quarter earnings per share of $1.32 and net income attributable to common shareowners of $1.2 billion, down five percent and four percent respectively, over the year ago quarter. Results for the current quarter include $0.09 per share of restructuring costs. Earnings per share in the year ago quarter included $0.11 of favorable one-time items net of restructuring costs. Excluding these items in both quarters, earnings per share increased 10 percent year over year.
Sales of $14.75 billion increased two percent, reflecting the benefit of organic growth (five points) partially offset by net divestitures (two points) and adverse foreign exchange (one point). First quarter segment operating profit increased four percent over the prior year quarter. Adjusted for restructuring costs and net one-time items, segment operating profit grew nine percent.
“UTC delivered strong results to start the year with continued momentum coming out of 2013,” said Louis Chenevert, UTC chairman and chief executive officer. “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.”
New equipment orders at Otis increased nine percent over the year ago first quarter, led by 27 percent growth in China. Foreign currency had an unfavorable impact of two points overall and a favorable impact of two points in China. Equipment orders at UTC Climate, Controls & Security increased 1 percent organically, with growth in HVAC and fire and security products partially offset by a decline at Transicold. Large commercial engine spares orders were up 11 percent at Pratt & Whitney and commercial spares orders increased nine percent at UTC Aerospace Systems.
“Continued organic growth and orders strength give us confidence in our sales expectation of $64 billion for 2014,” added Chenevert. “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. We now expect earnings per share of $6.65 to $6.85, up from $6.55 to $6.85 previously.”
Cash flow from operations was $1.3 billion and capital expenditures were $333 million in the quarter. Share repurchase was$335 million and UTC continues to anticipate share repurchase, acquisitions, and debt paydown of $1 billion each in 2014. The company continues to target cash flow from operations less capital expenditures equal to net income attributable to common shareowners for the year.
