Aerospace and equipment maker United Technologies (UTX) - Get Report on Tuesday reported fourth-quarter and full-year earnings that handily beat analysts’ estimates, though it warned of headwinds related to the ongoing grounding of Boeing's (BA) - Get Report 737 MAX aircraft.
The Farmington, Conn.-based company posted net income of $1.1 billion, or $1.32 a share, in the fourth quarter, vs. $686 million, or 83 cents a share, in the year-earlier quarter. On an adjusted basis, the company earned $1.94 a share, beating analysts’ estimates by 10 cents.
Sales were $19.6 billion, up 8% from a year earlier and slightly ahead of Wall Street forecasts of $19.4 billion.
The results were driven by ongoing strength in its aerospace division, as well as a return to profit in its Otis and Carrier elevator units, CEO Gregory Hayes said in a statement, noting the company was on track to “executing the final steps required to spin both businesses as independent companies early in the second quarter.”
However, looking forward, the company said it expects sales to drop into the “low single digits” vs. 2019, including an estimated five-point headwind from the suspension of 737 MAX production, as well expected costs associated with its pending merger with Raytheon (RTN) - Get Report.
For its Collins Aerospace unit, the company expects adjusted operating profit to be down between $275 million and $325 million vs. 2019, including an estimated headwind of approximately $550 million to $600 million resulting from the 737 MAX grounding.
For its Pratt & Whitney unit, however, United Technologies said it expects sales to be up “mid-single-digits” vs. 2019, with adjusted operating profit up between $225 million and $275 million vs. last year.
EU antitrust enforcers will rule by the end of next month whether to approve United Technologies and U.S. contractor Raytheon’s bid to create the $121 billion aerospace and defense giant. The deal also needs U.S. approval.
The two companies announced their tie-up intentions in June 2019.
United Technologies' shares were up 1.84% at $153.81 in trading on Tuesday. Raytheon stock was down 0.7% at $226.98.