United Technologies Says Strong Dollar, Slowing China To Dent Full-year Profit

By Ciara LinnaneMarketWatch Pulse

United Technologies Corp. warned Tuesday that profit at its UTC Aerospace Systems and Otis elevator unit would be lower-than-expected for all of 2015. "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 Gregory Hayes said in the company's second-quarter earnings statement. He said weakness for Otis in Europe and a slowing China had led the company to revise down estimates for both businesses. United Technologies is now expecting operating profit at UTC Aerospace to be down $25 million to $75 million from the year earlier, and at Otis to be down $300 million to $350 million, including the impact of the strong dollar. "While this revised forecast is disappointing, we remain confident in our long term outlook for the business," said Hayes. The company is planning to spend more on share buybacks and M&A and will look for cost cuts across the business. The company earned $1.5 billion, or $1.73 a share, in the second quarter, with the net income number down 6% from the year-earlier period. Excluding one-time items, EPS came to $1.81, compared with the FactSet consensus of $1.71. Sales fell 5% to $16.3 billion, below the FactSet consensus of $16.5 billion. Shares were down 1.8% in premarket trade, and are down 3.9% in the year so far, while the Dow Jones Industrial Average has gained 1.6%.

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