United Technologies Reports Second Quarter 2018 Results Raises 2018 Outlook
China Aviation Daily | Jul. 24, 2018
United Technologies Corp. today reported second quarter 2018 results and increased its full year sales and adjusted EPS outlook.
"Our second quarter results demonstrated continued positive momentum for United Technologies," said UTC Chairman and Chief Executive Officer Gregory Hayes. "This was our fourth consecutive quarter of delivering organic sales growth of 5 percent or better, which is a result of our investments in innovation across the portfolio. Earnings and free cash flow were also strong in the quarter."
"Based on our solid year-to-date performance, we are raising the low end of our 2018 sales outlook and now expect US$63.5 to US$64.5 billion of sales on improved organic growth of 5 to 6 percent. We are also raising our adjusted EPS outlook range and now expect US$7.10 to US$7.25, excluding 10 to 15 cents of projected dilution from the pending acquisition of Rockwell Collins, which we expect to close in the third quarter," Hayes concluded.
Second quarter sales of US$16.7 billion were up 9 percent over the prior year, including 6 points of organic sales growth and 2 points of foreign exchange benefit. GAAP EPS of US$2.56 was up 42 percent versus the prior year and included 59 cents of net restructuring charges and other significant items, including a one-time gain from the sale of Taylor Company in the quarter. Adjusted EPS of US$1.97 was up 6 percent.
Net income in the quarter was US$2.0 billion, up 42 percent versus the prior year. Net income excluding the gain on the sale of Taylor Company was US$1.5 billion. Cash flow from operations was US$2.1 billion and capital expenditures were US$372 million, resulting in free cash flow of US$1.7 billion. UTC continues to expect US$4.5 to US$5.0 billion of free cash flow in 2018.
In the quarter, commercial aftermarket sales were up 12 percent at both Pratt & Whitney and UTC Aerospace Systems. Otis new equipment orders were up 10 percent organically versus the prior year. Equipment orders at UTC Climate, Controls & Security increased 8 percent organically.
UTC updates its 2018 outlook and now anticipates:
- Adjusted EPS of US$7.10 to US$7.25, excluding Rockwell Collins, up from US$6.95 to US$7.15;
- Adjusted EPS dilution of US$0.10 to US$0.15 from the pending acquisition of Rockwell Collins, assuming a third quarter close;
- Sales of US$63.5 to US$64.5 billion, up from US$63.0 to US$64.5 billion;
- Organic sales growth of 5 to 6 percent, up from 4 to 6 percent;
- There is no change in the Company's previously provided 2018 expectations for free cash flow of US$4.5 to US$5.0 billion.
Contributed by United Technologies