Diversified U.S. manufacturer United Technologies Corp reported quarterly profit that topped Wall Street's expectations helped by lower restructuring costs, while revenue missed analysts' forecasts.
The world's largest maker of elevators and air conditioners recorded a 20 percent rise in earnings on Wednesday, ending a four-quarter streak of declines, as heavy cost-cutting that included some 15,000 job cuts last year paid off.
Sales were weaker than expected at the company's Sikorsky helicopter and fire and security equipment businesses, and United Tech's shares down slightly in light premarket trading.
First-quarter profit attributable to common shareholders came to $866 million, or 93 cents per diluted share, topping the 90 cents per share analysts had expected, according to Thomson Reuters I/B/E/S. A year earlier the company earned $722 million, or 78 cents per share.
The 2010 result included 5 cents per share of restructuring costs, less than the 9 cents per share recorded a year ago, as Chief Executive Louis Chenevert led the company through a major cost-cutting campaign in the face of a sharp economic downturn.
Deutsche Bank analyst Nigel Coe noted that the beat on earnings was driven entirely by one-time items, including lower restructuring charges and research expenses.
Revenue performance was soft, Coe added.
Revenue fell 1.3 percent to $12.09 billion, below the $12.26 billion analysts had expected.
United Tech, which also makes Pratt & Whitney jet engines, boosted the low end of its 2010 profit per share forecast, predicting a range of $4.50 to $4.65, up from a prior $4.40 to
Order trends are improving and that's all in line with our expectations for organic growth to resume in the second half of the year, said Chief Financial Officer Greg Hayes, on a conference call with analysts.
But he noted that the results of the company's cost-cutting campaign were the main reason for its more bullish stance.
We feel a lot more confident in the guidance, but a lot of that guidance confidence is coming from the cost traction that we've seen, Hayes said.
United Tech shares were down less than 1 percent to $73.74 in light premarket trading.
The Hartford, Connecticut-based company has started to see demand pick up for economically sensitive products like Carrier air conditioners, which are ordered on shorter notice than big-ticket items like aircraft engines.
It said that new equipment orders at its Otis elevator unit were up 9 percent.
Chenevert took on the chairmanship on January 1, completing a four-year transition of power from predecessor George David.
As of Tuesday's close, United Tech shares are up about 56 percent over the past year, outpacing the 36 percent rise of the Dow Jones industrial average <.DJI>, of which it is a component.
Several big U.S. industrials have beat Wall Street's expectations for the first quarter, but investors have kept the bar high, looking for strong revenue as an indication that CEOs had more than cost-cutting to thank for profit growth. Shares of both General Electric Co and Eaton Corp declined after those companies posted better-than-forecast profit.
United Tech's competitors include Eurocopter, a unit of EADS , in helicopters; GE in jet engines; and ThyssenKrupp AG in elevators.
(Reporting by Scott Malone; Editing by Derek Caney and Gerald E. McCormick)