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HARTFORD, Conn., October 16, 2008 –- United Technologies Corp. (NYSE:UTX) today reported third quarter 2008 earnings per share of $1.33 and net income of $1.3 billion, up 10 percent and 6 percent, respectively, over the year ago quarter. Results for the current quarter include a $0.03 per share net impact for restructuring costs in excess of a one time gain. In 2007, a one time gain exceeded restructuring costs for a net benefit of $0.04 per share. Excluding restructuring costs and the one time gains in both periods, earnings per share grew 16 percent year over year.
Third quarter consolidated revenues increased 7 percent to $14.8 billion, including 4 percent organic growth. Foreign currency translation accounted for 3 points of the revenue growth and $0.03 of the earnings per share increase. Cash flow from operations was $1.8 billion and capital expenditures were $268 million for the quarter.
“UTC had another solid quarter, with operating margin expansion of 50 basis points and four of six business units reporting double digit earnings growth,” said Louis R. Chênevert, UTC President and Chief Executive Officer. “Based on the strong performance in the first three quarters of the year, we are raising the bottom end of earnings per share guidance to $4.90 from $4.80. We now expect earnings per share of $4.90 - $4.95, up 15 to 16 percent above 2007 earnings per share.
“While we did see order rates slow in some businesses in the quarter given the current turmoil, our backlogs across UTC remain strong. We are confident our balanced portfolio, global footprint, and strong aftermarket presence will enable us to deliver on our guidance,” Chênevert said.
New equipment orders at Otis were flat in the quarter, with solid double digit growth in Asia offset by a decline in North America. Carrier’s Commercial HVAC new equipment orders were up double digits globally. Commercial aerospace spares orders in the quarter were below sales at Pratt & Whitney’s Commercial Engines business and approximately equal to sales at Hamilton Sundstrand.
Chênevert added, “In the face of ongoing economic challenges, we continue to aggressively reduce costs and restructure our businesses. In the third quarter, we spent $93 million on restructuring, and we’re on track to spend around $300 million for the full year. We also spent $950 million for share repurchase in the quarter for a total of $2.5 billion year to date and now expect share repurchase to be around $3 billion for 2008. We believe these actions, together with the balance of UTC’s businesses, will position us to outperform peers in 2009.
“Cash flow from operations less capital expenditures was 123% of net income in the quarter. We continue to expect cash flow from operations less capital expenditures to meet or exceed net income for the full year,” Chênevert continued.
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, cash flow, restructuring and share repurchases; anticipated benefits of UTC’s diversification, cost reduction efforts, 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; the impact of volatility and deterioration in financial markets on overall levels of economic activity; 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; and company-specific factors including the impact of financial market volatility and deterioration on the financial strength of customers and suppliers and on levels of air travel; the availability and impact of acquisitions; the rate and ability to effectively integrate 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.