UTC Reports Second Quarter EPS Growth of 21 Percent on 9 Percent Higher Sales; Increases 2011 Sales and EPS Outlook
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HARTFORD, Conn. – United Technologies Corp. (NYSE:UTX) today reported second quarter 2011 earnings per share of $1.45 and net income attributable to common shareowners of $1.3 billion, up 21 percent and 19 percent, respectively, over the year ago quarter. Sales of $15.1 billion for the quarter were 9 percent above prior year with 6 points of organic growth and 4 points of favorable foreign currency translation, partially offset by 1 point of net divestitures.
Results for the quarter included $0.05 per share of restructuring charges, offset by $0.05 of one-time items. The prior year quarter included a net charge for restructuring and one-time items of $0.12 per share. Before these items, earnings per share increased $0.13 or 10 percent year over year. Foreign currency translation net of currency impact at Pratt & Whitney Canada accounted for $0.06 of the earnings per share increase.
Second quarter segment operating margin at 15.9 percent was 120 basis points higher than prior year. Adjusted for restructuring costs and one-time items, segment operating margin at 15.9 percent was 20 basis points higher than prior year. Research and development costs increased year over year by $67 million to $526 million. Cash flow from operations was $1.3 billion and capital expenditures were $210 million in the quarter.
“For the first time since the second quarter of 2008, all six of our business segments reported organic sales growth in the quarter,” said Louis Chênevert, UTC Chairman & Chief Executive Officer. “More encouragingly, order rates remain strong and in line with expectations across most of the segments including our longer cycle commercial construction related businesses.
“Based on the exceptional first half performance at Carrier, strong order rates, and the weaker than planned U.S. dollar, we are raising the full year earnings per share expectation to a range of $5.35 to $5.45, up from $5.25 to $5.40 previously. We now anticipate 2011 EPS growth of 13 to 15 percent, on sales of $58 billion, up nearly 7 percent over 2010 and above prior expectation of $57 billion,” Chênevert added.
New equipment orders at Otis were up 23 percent over the year ago second quarter including favorable foreign exchange of 8 percentage points. Commercial HVAC new equipment orders at Carrier grew 13 percent including favorable foreign exchange of 4 points. Commercial spares orders at Pratt & Whitney’s large engine business grew 23 percent and at Hamilton Sundstrand were up 25 percent over the year ago second quarter.
“Cash flow from operations less capital expenditures was below net income attributable to common shareowners for the quarter due to the timing of cash receipts and product shipments. We continue to expect cash flow from operations less capital expenditures to meet or exceed net income attributable to common shareowners for the full year,” Chênevert continued. “With year to date share repurchases at $1.5 billion and acquisitions of $184 million, we now expect share repurchase for the year to be over $2.5 billion, and acquisitions of less than $1.5 billion.”
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.
The accompanying tables include information integral to assessing the company’s financial position, operating performance, and cash flow, including a reconciliation of differences between non-GAAP measures used in this release and the comparable financial measures calculated in accordance with generally accepted accounting principles in the United States.
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