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HARTFORD, Conn. – United Technologies Corp. (NYSE:UTX) today reported third quarter 2010 earnings per share of $1.30 and net income attributable to common shareowners of $1.2 billion, up 14 percent and 13 percent, respectively, over the year ago third quarter. Results for the current and prior year quarters included net charges for restructuring and one time items of $0.09 and $0.13 per share, respectively. Before these charges, earnings per share increased 9 percent year over year. Currency hedges at Pratt & Whitney Canada, net of foreign exchange translation, contributed $0.02 to the earnings per share increase.
Revenues of $13.5 billion for the quarter were 1 percent above prior year with 3 points of organic growth and 1 point of adverse foreign currency translation. Segment operating margin at 16.1 percent was 160 basis points higher than prior year. Adjusted for restructuring and one time items, segment operating margin of 16.3 percent was 90 basis points higher than prior year. Cash flow from operations was $1.7 billion and, after capital expenditures of $177 million, substantially exceeded net income attributable to common shareowners.
“UTC’s results this quarter reflect solid operating leverage with strong conversion on organic revenue growth,” said Louis Chênevert, UTC Chairman & Chief Executive Officer. “Sustained and structural cost reduction actions drove record segment operating margin, while we increased our investment in new game changing technologies. Cash generation continued to be exceptional, and we made additional contributions of $350 million to our domestic pension plans.
“Based on the strong year to date performance, we are raising 2010 earnings per share guidance to $4.70, the high end of our prior range of $4.60 to $4.70, while increasing restructuring, net of one time items, by $100 million,” Chênevert added. “As expected, commercial aerospace aftermarket orders have rebounded nicely but the commercial construction markets remain weak. Additional restructuring will further position us for solid earnings growth in the years ahead.”
New equipment orders at Otis were down 1 percent over the year ago third quarter. Commercial HVAC new equipment orders at Carrier grew 3 percent including unfavorable foreign exchange of 1 point. Commercial spares orders at Pratt & Whitney’s large engine business grew 35 percent and at Hamilton Sundstrand were up 13 percent over the year ago third quarter.
“We expect 2010 earnings per share will grow 14 percent over 2009 on revenues of $54 billion, up 2 percent,” Chênevert continued. “We now expect full year cash flow from operations less capital expenditures to exceed 100 percent of net income attributable to common shareowners. UTC’s leadership team remains focused on maximizing the potential of our world class franchises and achieving industry leading margins in all of our operating segments.”
Share repurchase was $494 million in the quarter and $1.6 billion year to date. Acquisition spend was $183 million in the quarter and $2.6 billion year to date. For the year, UTC expects that share repurchase and acquisition spend will be at least $2 billion and around $3 billion, respectively.
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, 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 uncertainties that could cause actual results to differ materially from those anticipated or implied in forward looking statements include the severity and duration of global recessionary conditions, including limited availability of credit; 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 foreign currency exchange rates, commodity prices, interest rates, and the impact of weather conditions; and company specific items including the impact of further deterioration or extended weakness in global economic conditions on demand for our products and services, the financial strength of customers and suppliers and on levels of air travel; financial difficulties, including bankruptcy, of commercial airlines; 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 repurchase 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.