10-QPeriod: Q1 FY2010

RTX Corp Quarterly Report for Q1 Ended Mar 31, 2010

Filed April 26, 2010For Securities:RTX

Summary

United Technologies Corporation (UTC) reported its first quarter 2010 financial results, demonstrating a resilient performance amidst a recovering global economy. The company saw a slight decrease in total revenues by 1.3% to $12.09 billion, largely due to organic revenue contraction offset by a favorable foreign currency translation impact. However, operating profit significantly increased by 23% to $1.54 billion, driven by strong cost reduction initiatives, the benefits of prior restructuring actions, and contributions from recent acquisitions. Net income attributable to common shareholders rose to $866 million, or $0.93 per diluted share, compared to $722 million, or $0.78 per diluted share, in the prior year quarter. A key driver of the quarter's performance was the strategic acquisition of GE Security for approximately $1.8 billion, which is expected to enhance the UTC Fire & Security segment. The company also made a significant investment in Clipper Windpower Plc, signaling an expansion into the wind power segment. Despite ongoing economic uncertainties, UTC's diversified portfolio across commercial and aerospace businesses, coupled with disciplined cost management, positions it well for continued recovery and future growth.

Financial Highlights

47 data points
Beta

Revenue

$12.04B

27.5% Gross Margin

Net Income

$866.00M

7.2% Net Margin

EPS (Diluted)

$0.93

Total Assets

$58.39B

Free Cash Flow

$1.15B

Financial Statements
Beta
Revenue$12.04B
Cost of Revenue$6.36B
Gross Profit$3.31B
R&D Expenses$397.00M
SG&A Expenses$1.42B
Operating Income$1.52B
Interest Expense$186.00M
Net Income$866.00M
EPS (Basic)$0.95
EPS (Diluted)$0.93
Shares Outstanding (Basic)913.60M
Shares Outstanding (Diluted)929.30M

Key Highlights

  • 1Total revenues decreased by 1.3% to $12.09 billion, while operating profit increased by 23% to $1.54 billion year-over-year.
  • 2Net income attributable to common shareholders was $866 million, a 19.9% increase from $722 million in Q1 2009.
  • 3Diluted earnings per share (EPS) rose to $0.93 from $0.78 in the prior year quarter.
  • 4The company completed the acquisition of GE Security for approximately $1.8 billion, significantly boosting the UTC Fire & Security segment.
  • 5UTC made a strategic investment of approximately $270 million in Clipper Windpower Plc, entering the wind power market.
  • 6Cash flow from operating activities significantly improved, rising to $1.15 billion from $485 million in the prior year quarter.
  • 7The company continued its share repurchase program, repurchasing $500 million of common stock in the first quarter.

Frequently Asked Questions

The substantial increase in operating profit was primarily driven by rigorous cost reduction initiatives implemented across the company, the benefits realized from previously completed restructuring actions, and the positive impact of foreign currency translation. Additionally, contributions from recent acquisitions, notably GE Security, also bolstered operating results.

The acquisition of GE Security, completed in March 2010 for approximately $1.8 billion, is a significant strategic move. It is expected to enhance the UTC Fire & Security segment by expanding its product portfolio and North American presence. Financially, it contributed to revenue growth and the overall increase in operating profit, with approximately $1.0 billion of goodwill and $600 million of identifiable intangible assets recorded from the acquisition.

UTC acknowledges signs of economic recovery globally, albeit modest and uneven. While short-cycle commercial businesses are showing improvement, longer-cycle aerospace businesses are still facing weak order rates. The company notes robust growth in construction markets in China and India, contrasting with continued weakness in North America and Europe. Airline profitability remains a concern, though airline operating results showed some encouragement in early 2010.

UTC plans to invest approximately $3.0 billion in acquisitions for 2010. The company continued its share repurchase program, buying back $500 million of stock in the first quarter and authorized a new 60 million share repurchase program. Dividends paid in the first quarter totaled $373 million, with a dividend of $0.425 per share declared for the next quarter.