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HARTFORD, Conn., January 23, 2008 -– United Technologies Corp. (NYSE:UTX) today reported fourth quarter 2007 earnings per share of $1.08 and net income of $1.1 billion, up 24 percent and 23 percent, respectively. Consolidated revenues for the quarter increased 15 percent to $14.7 billion, including organic growth of 8 percent. Cash flow from operations was $2.0 billion and, after capital expenditures of $456 million, substantially exceeded fourth quarter net income.
Full year earnings per share of $4.27 and net income of $4.2 billion increased 15 and 13 percent, respectively, from 2006 results. Revenues increased 14 percent to $54.8 billion, including 9 points of organic growth, 3 points from foreign exchange, and 2 points from acquisitions. Full year cash flow from operations was $5.3 billion and capital expenditures were $1.2 billion.
“UTC had a powerful close to 2007 and expects continuing good performance in 2008. Although the U.S. economic outlook is mixed, UTC’s balance across geographic and product markets should sustain yet another year of double digit earnings per share growth,” said UTC Chairman and Chief Executive Officer George David.
“Organic growth was 9 percent for 2007, a fourth year in a row at comparable levels. Markets across the board were good for us with the single exception of North American Residential for Carrier. Commercial aerospace volumes for UTC in total grew organically at 11 percent, as did our commercial construction businesses combined in Otis and Carrier at 10 percent.
“In 2007, all six UTC businesses grew operating profits at double digit rates, and we expect the same in 2008. Even with the significant deterioration in its North American Residential market, Carrier grew its operating profit overall at 12 percent on strong performances in its three other global businesses. Accordingly, UTC confirms its prior guidance range for 2008 earnings per share of $4.65 to $4.85, up 9 percent to 14 percent, respectively.
“Cash flow from operations less capital expenditures reached 99 percent of net income in 2007 in spite of two large non recurring outflows in the first quarter totaling $500 million. Very strong fourth quarter performance made this a good cash flow year for UTC in spite of these one time items, and we anticipate being at our usual standard of cash flow exceeding net income again in 2008,” David added.
Share repurchase in the quarter was $501 million and totaled $2.0 billion for the year. Acquisition spending, including debt assumed, was $2.3 billion for the year with $403 million in the fourth quarter. Debt to capital ended the year at 30 percent, lower than 2006.
Foreign currency translation increased fourth quarter revenues by 5 percent and earnings by $0.02 per share. Restructuring, tax related items, and other non recurring charges were $0.04 in excess of one time favorable items in the quarter. As previously disclosed, the year ago period included a $0.05 per share impact for restructuring charges in excess of one time favorable items.
Restructuring costs in the fourth quarter were $63 million, and in the year $166 million. Additional favorable items are anticipated in 2008 to offset trailing costs from previous restructuring actions and to fund new actions potentially initiated throughout the year.
The accompanying tables include information integral to assessing the company’s financial position, operating performance, and cash flow.
United Technologies Corp., based in Hartford, Connecticut, is a diversified company that provides a broad range of high technology products and support services to the building systems and aerospace industries.
This release is supplemented by presentation materials that are available on UTC's website at www.utc.com, and includes "forward looking statements" concerning expected revenue, earnings, cash flow, share repurchases, restructuring and other matters that are subject to risks and uncertainties. These statements often contain words such as “expect”, “anticipate”, “plan”, “estimate”, “believe”, “will”, “see”, “guidance” and similar terms. Important factors that could cause actual results to differ materially from those anticipated or implied in forward looking statements include changes in the health of the global economy; strength of end market demand in construction and in both the commercial and defense segments of the aerospace industry; fluctuation in commodity prices, interest rates, foreign currency exchange rates, and the impact of weather conditions; as well as company specific items including the availability and impact of acquisitions; the rate and ability to effectively integrate these acquired businesses; the ability to achieve cost reductions at planned levels; challenges in the design, development, production and support of advanced technologies and new products and services; delays and disruption in delivery of materials and services from suppliers; labor disputes; and the outcome of legal proceedings. The level of share repurchases may vary depending on the level of other investing activities. For information identifying other important economic, political, regulatory, legal, technological, competitive and other uncertainties, see UTC's SEC filings as submitted from time to time, including but not limited to, the information included in UTC's 10-K and 10-Q Reports under the headings "Business", "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Cautionary Note Concerning Factors that May Affect Future Results", as well as the information included in UTC's Current Reports on Form 8-K.