United Technologies Corp posted a 23 percent drop in profit and lowered its 2009 forecast as it faces weaker-than-expected orders for equipment used in large buildings and aircraft.
The world's largest maker of elevators and air conditioners said on Tuesday that cost cuts were starting to pay off and its rate of order decline appeared to stabilizing. Second-quarter earnings were slightly higher than analyst expectations.
The company, which also makes jet engines and helicopters. looks for full-year earnings of $4 to $4.20 per share, down from a prior range of $4 to $4.50. Wall Street is more bearish, on average looking for $4.10 per share.
United Tech expects profits to grow next year due to cost cutting, Chief Financial Officer Greg Hayes told investors on a conference call.
We do not anticipate a significant economic recovery in 2010, Hayes added.
EPS BEATS ESTIMATES
Second-quarter profit fell to $976 million, or $1.05 per diluted share, from $1.275 billion, or $1.32 per share, a year earlier. Analysts looked for $1.04 per share.
Revenue dropped 17 percent to $13.2 billion from $15.9 billion.
The revenue decline was steeper than analysts expected, Deutsche Bank analyst Nigel Coe wrote in a note to clients. The company lowered its full-year revenue forecast to $53 billion from $55 billion.
CFO Hayes said he expected the company to be more aggressive in buying back its shares in the second half of the year.
The stock fell 81 cents, or 1.5 percent, to $54.16 on the New York Stock Exchange. Over the past 12 months it is down 17 percent, while the Dow Jones industrial average <.DJI> is off 23 percent.
The Hartford, Connecticut-based company is facing slumps in two key end markets: commercial construction and aviation.
Its competitors include Eurocopter, a unit of EADS in helicopters, General Electric Co in jet engines and ThyssenKrupp in elevators.
(Reporting by Scott Malone; Editing by Derek Caney and Jeffrey Benkoe)