Summary
United Technologies Corporation (RTX) reported a strong third quarter and year-to-date performance for 2014. Net sales increased by 5% for the quarter and 5% for the nine-month period, reaching $16.2 billion and $48.1 billion, respectively. This growth was driven by broad-based organic sales increases across all five business segments: Otis, UTC Climate, Controls & Security, Pratt & Whitney, UTC Aerospace Systems, and Sikorsky. The company demonstrated improved profitability, with operating profit increasing by 16% for the quarter to $2.75 billion and by 5% for the nine-month period to $7.2 billion. Key drivers for the quarter included robust performance in the commercial businesses, particularly UTC Climate, Controls & Security, which saw a 16% increase in operating profit driven by volume, price, restructuring savings, and commodity cost benefits. The aerospace businesses also showed significant strength, with Pratt & Whitney's operating profit up 44% due to higher commercial aftermarket and engine sales, and UTC Aerospace Systems up 15% driven by commercial aerospace volumes. Despite some headwinds, such as increased R&D spending at Pratt & Whitney, the company managed its costs effectively, leading to a solid increase in net income attributable to common shareholders from continuing operations to $1.85 billion for the quarter and $4.75 billion for the nine months.
Financial Highlights
49 data points| Revenue | $14.61B |
| Cost of Revenue | $7.34B |
| Gross Profit | $4.45B |
| R&D Expenses | $640.00M |
| SG&A Expenses | $1.50B |
| Operating Expenses | $12.31B |
| Operating Income | $2.61B |
| Interest Expense | $185.00M |
| Net Income | $1.85B |
| EPS (Basic) | $2.07 |
| EPS (Diluted) | $2.04 |
| Shares Outstanding (Basic) | 897.70M |
| Shares Outstanding (Diluted) | 910.20M |
Key Highlights
- 1Total net sales for the quarter increased by 5% to $16.17 billion, and by 5% year-to-date to $48.10 billion, driven by broad-based organic growth across all segments.
- 2Operating profit for the quarter rose 16% to $2.75 billion, and by 5% year-to-date to $7.20 billion, indicating improved operational efficiency and profitability.
- 3Pratt & Whitney's operating profit saw a substantial increase of 44% for the quarter and 3% year-to-date, driven by commercial aftermarket, engine sales, and favorable contract performance.
- 4UTC Climate, Controls & Security delivered strong results with a 16% increase in operating profit for the quarter, attributed to volume, price, cost productivity, and favorable commodity costs.
- 5Earnings per share (diluted) from continuing operations increased to $2.04 for the quarter and $5.20 for the nine months, up from $1.55 and $4.64 in the prior year periods, respectively.
- 6The company repurchased approximately 3.8 million shares of common stock during the quarter for $424 million, demonstrating a commitment to returning capital to shareholders.
- 7Restructuring costs of $243 million were incurred for the nine months ended September 30, 2014, primarily related to ongoing cost reduction efforts and integration of acquisitions.