United Technologies Beats Street, But Sees Defense Downside
United Technologies reported a boost in third quarter earnings of 13 percent, at $1.55 per share, beating analysts' expectations. The Hartford-based conglomerate trimmed its full-year revenue estimates, however, because of the government shutdown and cuts in military spending.
Chief Financial Officer Greg Hayes said that while commercial aerospace is robust, the defense industry is a different story. "The military business remains a headwind," he told a conference call, "with sales down 14 percent. We see this impact across our aero businesses, but most acutely at Sikorsky. Given the continued impasse in Washington, we don't expect to see this trend improve over the next year."
Hayes said the only hope for more rapid improvement would be a congressional budget deal. That would bring an end to sequestration cuts year, leading to more normal growth in defense businesses.