United Technologies forecasts 2008 results

Expects to generate $60 billion
December 14, 2007 9:24:38 AM PST
United Technologies Corp. on Thursday said it expects to generate revenue of $59 billion in 2008, beating Wall Street estimates, and sees earnings of between $4.65 per share and $4.85 per share.United Technologies is the parent company of jet engine manufacturer Pratt & Whitney, airline power systems maker Hamilton Sundstrand and Sikorsky Aircraft.

Louis Chenevert, president and chief operating officer of United Technologies, told a conference in New York that the Hartford-based company expects to finish 2007 with per-share earnings of $4.22 to $4.25, a 14-percent increase over last year, though it fell short of expectations.

Analysts surveyed by Thomson Financial expected per-share earnings for 2007 of $4.26 and revenue of $54 billion. For 2008, analysts said per-share earnings would reach $4.85 and revenue $57.6 billion.

United Technologies also announced it would repurchase $2 billion worth of shares in 2008.

Chenevert credited United Technology's overall strength to aerospace and commercial construction markets that "more than offset continued deterioration" in the U.S. residential heating, ventilating and air conditioning market. Those businesses are under United Technologies' Carrier unit, which has exposure to the weak housing market.

United Technologies said in its guidance that Sikorsky Aircraft and Fire & Security will lead the corporation's businesses in operating profit growth next year. Both are expected to turn in about a 25 percent rise.

United Technologies has set aside $2 billion for mergers and acquisitions, Chenevert said. "We think it's a nice environment with some of the market tension," he said, without being specific.

In the past, United Technologies has increased share repurchases when corporate officials did "not find a right deal," he said.

He said Pratt & Whitney's next-generation Geared Turbofan, which the company spent 20 years designing, is a "deal changer." Japanese machinery maker Mitsubishi Heavy is using a Pratt & Whitney engine for its planned small jet.

Pratt says the engine provides significant improvements in fuel efficiency that also will result in fewer carbon emissions and lower fuel costs for airlines. It also said the engine generates less noise than other airplane engines.

Chenevert said investments at Hamilton Sundstrand have delivered a "big win" with its selection by Boeing's Dreamliner. Hamilton Sundstrand manufactures power systems for the aircraft.

Chenevert, 50, was previously president of Pratt & Whitney and was tapped by the board of directors in 2006 to succeed George David, United Technologies' 65-year-old chief executive officer, next year.


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