United Technologies sees profits taking-off in 2019
United Technologies shrugged off concerns about the strength of the dollar to forecast solid profit growth for 2019 as it posted above-estimate fourth-quarter numbers.
The American aircraft specialist reported sales of $18bn for the fourth quarter, a 15% increase, and adjusted earnings per share of $1.95, a 22% hike and well above most analyst expectations.
Full-year sales were up 11% at $66.5bn while adjusted earnings rose 14% to $7.61 per share.
The company said that it had seen the best organic sales growth “for over a decade” in 2018, which chairman and chief executive Gregory Hayes said had been “driven by our focus on meeting customer commitments, ongoing innovation, strong executive and cost reduction.”
He added: “Looking to 2019, our segment profit is expected to grow faster than sales, and free cash flow, excluding separation costs, is expected to grow faster than earnings.” The company has pencilled in adjusted earnings of $7.70 to $8 a share in 2019, which it said “included headwinds from a higher adjusted effected tax rate and a stronger US dollar.”
Last year, United Technologies acquired aircraft parts manufacturer Rockwell Collins in a $23bn deal. The company will now focus on its core aerospace business, while the Otis lifts and Carrier air conditioning arms are spun out as stand-alone businesses.
“We remain laser focused on executing our strategic places for our business, each of which is expected to drive sustained growth […] and maximise value creation over the long term,” Hayes said.
United Technologies’ share price rose nearly 5% in pre-market trading.