United Technologies Corp. pushed up its annual profit forecast for the second time this year, reaping continued strength in the aerospace market and buoying CEO Greg Hayes’s plan to reorganize the company around aviation and defense.
Adjusted earnings will be $7.90 to $8.05 a share this year, up from a previous expectation of at least $7.80, the company said Tuesday as it reported second-quarter results.
The revised forecast, combined with higher sales in the aerospace division, lifts UTC as Hayes prepares to spin off the elevator and air-conditioner operations and merge with weapons maker Raytheon Co.
The sweeping transformation comes on the heels of UTC’s acquisition late last year of Cedar Rapids-based Rockwell Collins.
“Everything continues to be on track with all of the portfolio separations activities,” Hayes said on a conference call with analysts. “We will get this done and we’re confident by the early part of next year we’ll be ready to go with the spins.”
Sales in the Collins Aerospace and Pratt and Whitney jet-engine segments each rose 9 percent in the second quarter on an organic basis, which strips out the effects of currency changes or acquisitions.
UTC cited particular strength in the aerospace commercial aftermarket, which boosted sales 16 percent, and military engine business, which was up 13 percent.
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The company plans to expand its defense portfolio with the Raytheon deal, tapping into a foreign sales boom that has benefited market leader Lockheed Martin. The performance of Lockheed’s missiles and fire control division was particularly strong.
As with virtually every supplier in the commercial aviation market, UTC is affected by the troubles facing Boeing’s 737 MAX, which has been grounded since March following a pair of fatal crashes.
UTC, which makes parts for the plane as well as an engine for a rival jet, has said that it expected a 10 cent headwind if MAX production rates remain low throughout this year.