United Technologies Falls on China, Strong Dollar

United Technologies Corp. (NYSE:UTX) said Tuesday that sales fell 5% in the June quarter because of weakness in the Otis elevator unit and the negative effect of the strong dollar.

Shares, which have fallen about 4% this year through Monday's close, fell 3.4% in light premarket trading.

"With six months of trends behind us, it is now clear the commercial aftermarket at UTC Aerospace Systems will be significantly below our expectations for the year," Chief Executive Greg Hayes said. "This, along with continuing softness in Otis Europe and a slowing China, led us to reassess our 2015 outlook for UTC Aerospace Systems and Otis."

For the year, the company now expects operating profit at aerospace systems to be down $25 million to $75 million and at Otis to be down the same amount at constant currency. Including the negative impact of foreign exchange, it expects profit at the Otis elevator unit, which makes a large amount of its profits in Europe, to be down $300 million to $350 million.

United Tech earlier this week sold its Sikorsky helicopter unit to Lockheed Martin for $9 billion.

As a result, it now expects per-share earnings of $6.45 to $6.60 for the year from operations, including Sikorsky. This is down from its previous expectations of $6.55 to $6.85 a share.

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In the most recently ended quarter, Sikorsky helicopter sales fell to $1.69 billion from $2.38 billion a year earlier.

In the Otis unit, sales fell to $3.1 billion from $3.37 billion. Sales in the Pratt & Whitney segment grew to $3.68 billion from $3.59 billion.

Overall, the company reported a profit of $1.54 billion, or $1.73 a share, down from $1.68 billion, or $1.84 a share, a year earlier.

Total sales fell to $16.33 billion from $17.19 billion.

Excluding restructuring costs and other items, earnings were $1.81 a share. Foreign currency had a negative impact of six cents a share.

Analysts had predicted earnings of $1.71 a share and revenue of $16.52 billion.