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HARTFORD, Conn., July 17, 2008 -– United Technologies Corp. (NYSE:UTX) today reported second quarter 2008 earnings per share of $1.32 and net income of $1.3 billion, up 14 percent and 11 percent, respectively, over the year ago quarter. Results for the current quarter include a $0.06 per share impact for restructuring costs as compared with a $0.02 per share impact in the year ago quarter. Excluding restructuring costs in both periods, earnings per share grew 17 percent year over year.
Second quarter consolidated revenues increased 13 percent to $15.7 billion, including 6 percent organic growth. Foreign currency translation accounted for 5 points of the revenue growth and $0.04 of the earnings per share increase. Acquisitions accounted for the remainder of the revenue growth.
“UTC segment operating profit grew 12 percent in the quarter, with exceptional performance at Otis, UTC Fire & Security, and Sikorsky,” said Louis R. Chênevert, UTC President and Chief Executive Officer. “Based on the strong performance in the first half of the year, we are increasing our full year revenue and earnings per share guidance. We now expect revenue of more than $60 billion and earnings per share of $4.80 - $4.95, up from the prior guidance of $4.65 - $4.85 and 12 to 16 percent above 2007 earnings per share.”
“While the challenges in the world’s economies we saw at the outset of the year are materializing, especially with higher oil prices impacting the airlines and the U.S. economy generally, we remain confident in our ability to deliver on this increased guidance given the balance across UTC’s businesses and the strength in our backlogs,” Chênevert said.
“New equipment orders at Otis grew 23 percent in the quarter, including double digit growth in North America, Europe and China, while Carrier’s commercial HVAC new equipment orders grew double digits globally. After strong orders through the early months of 2008, we are seeing some moderation in our commercial aerospace aftermarkets, with spare parts orders in the second quarter slightly below sales at both Pratt & Whitney and Hamilton Sundstrand.”
Chênevert added, “We continue to position the company for solid earnings growth in 2009 and beyond. We now expect to spend approximately $300 million on restructuring in 2008, substantially above the $150 million anticipated at the beginning of the year. We believe these actions, together with the balance of UTC’s businesses, will help us outperform.”
Cash flow from operations was $1.4 billion and capital expenditures were $305 million for the quarter. Share repurchase totaled $719 million in the quarter and more than $1.5 billion in the first half. UTC anticipates continuing opportunistic repurchases over the balance of the year and potentially beyond the company’s guidance of $2.0 billion for 2008.
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 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.
This release includes "forward-looking statements" concerning expected revenue, earnings and cash flow; anticipated benefits of UTC’s diversification and business model; and other matters. These matters are subject to risks and uncertainties. Important factors that could cause actual results to differ materially from those anticipated or implied in forward looking statements include the health of the global economy; strength of end market demand in building 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; and company-specific factors 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.