United Technologies Corp. says its acquisition of Cedar Rapids-based Rockwell Collins late last year was a boon for its bottom line.
The Farmington, Conn. company announced in late April its first-quarter revenue increased to $18.4 billion this year, or a 20.5 percent jump compared to its $15.2 billion over the same quarter in 2018.
UTC acquired Rockwell Collins for $30 billion, including debt, in late November and joined it with Charlotte, N.C.-based UTC Aerospace Systems to form Collins Aerospace Systems. The combined company had approximately 70,000 employees when the deal was announced.
Of UTC’s $18.4 billion in first-quarter revenue, $6.5 billion came from Collins Aerospace and $4.8 billion came from aircraft engine manufacturer Pratt and Whitney — up 70.6 percent and 11.3 percent, respectively, from first quarter 2018.
The company’s other two subsidiaries, HVAC company Carrier and elevator company Otis, brought in $4.3 billion and $3.1 billion for the quarter, or a respective 1.2 percent decrease and 1.9 percent increase from 2018’s first quarter.
Net income for United Technologies within the quarter ultimately was $1.35 billion, up 3.8 percent from $1.3 billion in the first quarter of 2018.
Results for the four companies “exceeded expectations primarily due to better than expected Collins Aerospace and Otis results as well as a slightly favorable effective tax rate,” UTC wrote in an investor release.
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United Technologies CEO Gregory Hayes said in the release the earnings reinforced “our confidence in the full-year financial outlook,” and prompted the company to adjust its 2019 earnings per share range to $7.80 to 8.00, up from $7.70 to 8.00. Hayes told investors in an earnings conference call late last month that acquiring Rockwell Collins boosted earnings per share by 20 cents in the first quarter.
The company did not change its range for 2019 sale expectations, from $75.5 billion to $77 billion.
Hayes said in the release UTC was making progress on spinning off Carrier and Otis into separate, independent companies and remains “on track” to do so within the first half of 2020.
The spinoffs will be a “positive move” for Collins Aerospace and help the company grow and innovate as part of a “more focused, aerospace-centric business,” Collins Aerospace spokeswoman Pam Tvrdy-Cleary told The Gazette last year.
Though some activist investors had pressured UTC to spin off Carrier and Otis and focus more on aerospace, the Washington Post reported the company’s stock price dropped nearly 6 percent the day after those spinoffs were announced.
The drop likely was a result of longtime UTC investors “attached” to the idea of a diversified holding company, the Post said.
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