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(Reuters)

United Tech Beats Forecasts, Narrows Forecast

Industries Reuters

United Technologies beat analysts' profit and sales estimates with third-quarter results on Tuesday, and notched up the low end of its full-year profit forecast, sending shares higher in pre-market trading.

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The results suggest increasing confidence at the aerospace, elevator and building controls company, which had faced concerns about delivery delays of its new Pratt & Whitney geared turbofan engine and weak demand for elevators.

United Technologies shares were up 2 percent at $101.49 in premarket trading.

Chief Financial Officer Akhil Johri told Reuters that rising deliveries of aircraft such as the Airbus A320neo and A350 and Boeing 787 had boosted sales growth, helped by the increase in components the company supplies to these latest jets.

"The aerospace side of the business is still doing well," Johri said.

Revenue growth will continue in 2017 as deliveries of Pratt engines and other aerospace parts increase, though aerospace margins will be pressured because the new engines are less profitable in the initial years of production, he added.

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Sales and prices in China also will remain under pressure. "China will be a little bit difficult" in 2017, Johri said. But the Otis elevator division is gaining market share.

"Orders are up 3 percent and the market is down more than 5 percent," he said.

United Technologies posted a 5 percent rise in adjusted earnings to $1.76 a share, compared with $1.66 that analysts, on average, had expected, according to Thomson Reuters I/B/E/S.

Sales rose to $14.35 billion compared with estimates of $14.27 billion. United Technologiesraised the bottom end of its adjusted 2016 earnings forecast by 10 cents to between $6.55 and $6.60 a share.

In another sign of confidence, the company spent $6 billion on share repurchases in the quarter, keeping it on track to deliver a promised $22 billion through buybacks and dividends from 2015 through 2017.

Net income attributable to common shareholders rose to $1.48 billion in the third quarter ended Sept.30, from $1.36 billion a year earlier. Earnings from continuing operations attributable to common shareholders rose to $1.74 per share from $1.61.

(Reporting by Alwyn Scott in New York and Arunima Banerjee in Bengaluru; Editing by Sriraj Kalluvila and Chizu Nomiyama)