BOSTON - Diversified U.S. manufacturer United Technologies Corp expects profit to rise about 10 percent next year despite an uncertain economic recovery, as a year of heavy cost-cutting pays off.
The world's biggest maker of elevators and air conditioners expects commercial construction to remain weak in the United States and Europe next year, partly offset by strong growth in China, Chief Executive Louis Chenevert told analysts on Thursday.
He also noted he expects global air traffic to pick up next year, a boon to United Tech's jet engine and aircraft electronics businesses.
The company expects to earn $4.40 to $4.65 per share in 2010, up from the $4.10 per share it forecasts for 2009. At its midpoint, next year's profit forecast would represent a 10 percent increase from its 2009 expectation.
It looks for revenue of $54 billion to $55 billion, up from $53 billion this year. Factoring out acquisitions and currency fluctuation, the company anticipates revenue being flat to up 2 percent for the year.
Analysts, on average, looked for 2010 profit of $4.53 per share, compared with a forecast of $4.11 per share for 2009, according to Thomson Reuters I/B/E/S.
The forecast reflects end market stabilization but also some uncertainty in the shape of the recovery we're going to see over the next 12 months, Chenevert said.
The company expects to spend about $3 billion on M&A next year, including a $1.82 billion deal it inked in November for General Electric Co's security arm. It also aims to repurchase about $1.5 billion in shares.
The Hartford, Connecticut-based company has cut some 15,000 jobs this year. It has been forecasting that profit growth would resume in 2010 since April.
United Tech shares have risen about 41 percent over the past year, more than double the 19 percent rise of the Dow Jones industrial average .DJI.
Big U.S. manufacturers so far have been guarded in their forecasts about 2010, saying that they expected business conditions to improve next year but not predicting a quick rebound from the worst downturn the United States has endured since the Great Depression of the 1930s.
3M Co, maker of products ranging from Post-It notes to films for flat-panel televisions, on Tuesday said it expected recovery to be patchy and slow and forecast 2010 profit growth of about 9 percent.
GE and Honeywell International Inc are due to give Wall Street their 2010 forecasts next week.
(Reporting by Scott Malone; editing by Carol Bishopric and Gunna Dickson)