HARTFORD, Conn.-- United Technologies Corp. (NYSE: UTX) President and Chief Executive Officer Louis R. Chênevert announced $600 million of additional restructuring actions for 2009 and now expects restructuring for the year to total $750 million. These actions will result in global employment reductions of 11,600, primarily from overhead and SG&A reductions throughout UTC. Additional hourly workforce adjustments may occur during 2009 based on market driven production volume changes. The expanded restructuring responds to anticipated 2009 revenues $2.7 billion below the company’s December guidance due to contracting markets worldwide.
Earnings per share guidance is being revised to a range of $4.00 to $4.50, including $0.30 to $0.40 for the $750 million of total 2009 restructuring costs net of anticipated one-time gains of $200 million to $350 million. Consistent with prior guidance, the earnings per share range excludes the impact of acquisition-related costs, if any, resulting from the adoption of SFAS 141(R). The revised revenue guidance of approximately $55 billion also includes $1 billion from the first-time adoption of EITF Issue No. 07-1, which covers revenues associated with engine collaboration agreements. The company continues to expect 2009 cash flow from operations less capital expenditures equal to or in excess of net income.
“The outlook for commercial aerospace and global construction markets has continued to deteriorate since UTC’s December investor meeting and the economic recovery previously anticipated in the second half of 2009 now appears unlikely,” said Chênevert. “These expanded restructuring actions are required to protect UTC profitability and are expected to position the company for resumed earnings growth in 2010. In 2008, UTC anticipated slowing economies for 2009, although not at the severity which has since developed. Savings from 2008 and 2009 restructuring and other 2009 actions will result in total cost reductions exceeding $1 billion in 2009. Employment reductions will total approximately 18,000 or slightly more than 8 percent over the two years. These difficult actions will allow us to continue outperforming peers.”
UTC also revised share repurchase guidance for the year to $1 billion from $2 billion while preserving the usual acquisitions placeholder of $2 billion. “We want to be in a position to take advantage of strategically attractive opportunities that may arise in the current market conditions. UTC’s strong balance sheet and operating cash flows enable us to do this,” Chênevert added.
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; anticipated benefits of UTC’s diversification, cost reduction efforts and business model; and other matters that are subject to risks and uncertainties. These statements often contain words such as “expect,” “anticipate,” “plan,” “estimate,” “believe,” “will,” “should,” “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 further deterioration or extended weakness in global economic conditions; further tightening or extended contraction in credit conditions; the impact of volatility and deterioration in financial markets on overall levels of economic activity; declines in 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 items 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 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.