Elevator and air conditioner maker United Technologies reported better-than-expected first quarter earnings Tuesday morning, beating the Street on revenue — sales increased in nearly all of its business units — and profit, which despite a 5% decline was not as low as analysts were expecting. As a result of the earnings beat, as well as an improved 2014 full-year outlook, shares of United Technologies are in the green in Tuesday’s morning trading session.
United Technologies reported $14.75 billion in first quarter revenue, a figure that edges above the $14.68 billion the Street was expecting and marks 2% growth compared to the same time in 2013. The company attributed the growth to 5% organic growth that was offset by net divestitures (which had a 2% impact) and an adverse foreign exchange impact (1%). First quarter net income came in at $1.2 billion, a 5% decline over the prior-year quarter, and earnings came in at $1.32 per share, a 4% drop over the same time in 2013 but 5 cents above the analyst consensus.
The company noted that the first quarter’s results included a negative 9-cent per-share impact from restructuring costs, and the prior-year quarter included a positive 11-cent per share impact from favorable one-time items — so excluding both of these special items, earnings per share increased 10% year-over-year.
“United Technologies delivered strong results to start the year with continued momentum coming out of 2013,” Louis Chenevert, United Technologies chairman and CEO, said in a statement Tuesday morning. “All five of the segments contributed to the company’s organic sales growth in the quarter. Our focus on growth and execution is paying off as we capitalize on improving end markets.”
New equipment orders at Otis, a division of United Technologies and the world’s biggest maker of elevators, escalators and other “people-moving products” (like moving walkways), increased 9% for the quarter due to 27% growth in Chinese orders. United Technologies said that new equipment orders in its climate, controls and security segment increased 1% organically with growth in HVAC (heating, ventilation, and air conditioning) products as well as fire and security products offset by a decline in demand for container refrigeration products in the Transicold brand. Pratt & Whitney, an aerospace manufacturer and subsidiary of United Technologies, saw large commercial engine spare orders increase 11% while commercial spare orders at UTC Aerospace Systems increased 9% for the quarter.
“Continued organic growth and orders strength give us confidence in our sales expectation of $64 billion for 2014,” added Chenevert. He said that based on the sales outlook, paired with cost reduction plans, the company is raising the lower end of its full-year earnings per share guidance: United Technologies is now providing a range of full-year 2014 earnings of $6.65 to $6.85 per share, up from the prior range of $6.55 to $6.85.
Following the release of the earnings results, shares of United Technologies opened at $119.30, a dollar higher than Monday’s close, and are currently trading for an 0.65% gain. Year-to-date, the stock has posted a 5.2% return.
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