Summary
United Technologies Corporation (UTC) reported its first quarter results for 2012, highlighting a modest decrease in net sales to $12.42 billion from $12.68 billion in the prior year. Despite this slight revenue dip, operating profit saw a marginal increase to $1.70 billion from $1.69 billion, indicating effective cost management. A significant development during the quarter was the classification of certain non-core businesses as 'Discontinued Operations,' following a Board of Directors' decision to divest them. This resulted in a substantial net loss of $853 million from discontinued operations, largely due to goodwill impairment charges of $950 million related to the planned divestitures of Rocketdyne and Clipper Windpower, significantly impacting the overall net income attributable to common shareholders. The company is actively pursuing the acquisition of Goodrich Corporation, a major aerospace and defense supplier, with an expected closing in mid-2012, and has secured significant financing arrangements to support this strategic move. Restructuring costs of $138 million were also recorded, reflecting ongoing efforts to optimize operations. From an operational standpoint, the aerospace businesses, including Pratt & Whitney and Hamilton Sundstrand, showed organic sales growth, driven by military engine deliveries and aftermarket sales, and commercial production and aftermarket volume, respectively. However, Sikorsky experienced a notable sales decline. The commercial businesses, Otis and UTC Climate, Controls & Security, saw mixed results, with Otis facing challenges in China and UTC Climate, Controls & Security benefiting from a significant gain on the sale of a joint venture interest. The company's liquidity remains strong, with substantial cash and cash equivalents and access to credit facilities, positioning it to manage its ongoing operations and strategic initiatives, including the substantial Goodrich acquisition.
Financial Highlights
46 data points| Revenue | $12.42B |
| Cost of Revenue | $6.32B |
| Gross Profit | $3.49B |
| R&D Expenses | $544.00M |
| SG&A Expenses | $1.53B |
| Operating Expenses | $11.00B |
| Operating Income | $1.71B |
| Net Income | $330.00M |
| EPS (Basic) | $0.37 |
| EPS (Diluted) | $0.36 |
| Shares Outstanding (Basic) | 890.90M |
| Shares Outstanding (Diluted) | 903.90M |
Key Highlights
- 1Net sales for the quarter decreased slightly by 2% to $12.42 billion compared to $12.68 billion in the prior year.
- 2Operating profit remained stable at $1.70 billion, indicating good cost control despite lower sales.
- 3A significant net loss of $853 million was recorded from discontinued operations, primarily due to $950 million in goodwill impairment charges related to the planned divestiture of non-core businesses (Rocketdyne and Clipper Windpower).
- 4The company is progressing with the acquisition of Goodrich Corporation, valued at $18.4 billion, expected to close in mid-2012, and has arranged significant financing, including a $15 billion bridge loan facility.
- 5Restructuring costs totaled $138 million, reflecting ongoing efficiency initiatives across various segments.
- 6Aerospace segments (Pratt & Whitney, Hamilton Sundstrand) demonstrated organic sales growth, while Sikorsky saw a decline.
- 7The UTC Climate, Controls & Security segment recorded a significant gain of approximately $215 million from the sale of a joint venture interest as part of its portfolio transformation.