The 2009 first quarter’s results include $0.12 per share in restructuring costs and $0.03 per share from a one time tax benefit. Earnings per share in the year ago quarter included $0.02 in restructuring costs. Before these items, earnings per share declined 17% year over year. Adverse foreign currency translation and currency hedges at Pratt & Whitney Canada totaled $0.08 in the first quarter of 2009.
“Market conditions and UTC’s operating performance were consistent with expectations reviewed with investors at UTC’s March 12 meeting,” said Louis Chenevert, United Technologies president and chief executive officer. “We continue to execute well in the face of difficult end markets and currency headwinds. A relentless focus on cost reductions across the businesses limited the impact on profits from a $1.7 billion decline in revenues, with 80 basis points of operating margin expansion at Otis and 70 basis points each at UTC Fire & Security and Sikorsky, all before restructuring costs.”
New equipment orders at Otis declined 43% over the year ago first quarter, including 6 points from the stronger dollar. On the same basis, Carrier’s Commercial HVAC new equipment orders were down 24% (foreign exchange 7 points). Commercial spares orders were down 28% at Pratt & Whitney’s large engine business and down 26% at Hamilton Sundstrand.
“As anticipated, order trends were weak in the quarter although we saw stabilization in the rate of year-over-year decline across most of our businesses in March,” Chenevert added. “We remain on track to meet the full year revenue and earnings guidance for UTC overall despite the tough economic environment. Revenues for 2009 are expected at $55 billion with earnings per share in the range of $4.00 to $4.50, down 8% to 18% over the prior year, excluding the impact of acquisition related costs resulting from the application of SFAS 141(R).
“We’re executing aggressively on the $750 million restructuring program for 2009 announced last month and initiated $163 million of actions in the first quarter,” Chenevert continued. “The associated cost reductions will allow UTC to outperform even in this environment and position us to resume earnings growth in 2010.”
Cash flow from operations was $485 million and capital expenditures were $167 million for the quarter. Share repurchase totaled $200 million and acquisition spending was $122 million.
“Cash flow from operations less capital expenditures was below net income attributable to common shareowners for the quarter reflecting normal Carrier seasonality and higher working capital at Sikorsky and Pratt & Whitney. Capital expenditures were 30% below the year ago quarter,” Chenevert added. “We continue to expect cash flow from operations less capital expenditures to meet or exceed net income attributable to common shareowners for the year.”
United Technologies is a US-based provider of high technology products and services.
