Raises outlook for 2017 sales and low end of adjusted EPS and organic sales growth
Sales of $15.3 billion, up 3 percent versus prior year including 3 percent organic sales growth
GAAP EPS of $1.80, up 5 percent versus prior year
Adjusted EPS of $1.85, up 2 percent versus prior year
Cash flow from operations of $2.1 billion, 149 percent of net income
Free cash flow attributable to net income of 118 percent
United Technologies Corp. (NYSE: UTX) reported second quarter 2017 results. All results in this release reflect continuing operations unless otherwise noted.
“United Technologies delivered another quarter of strong results with sales up 3 percent including 3 percent organic sales growth and robust cash flow,” said UTC Chairman and Chief Executive Officer Gregory Hayes. “Our performance is in-line with our expectations as we continue to execute on our strategic priorities, including growing the business through our investments in innovative products and services, delivering on our aerospace backlog, and achieving our cost reduction goals, while maintaining a disciplined approach to capital allocation.”
“Based on our solid year-to-date performance and outlook for the remainder of 2017, we are raising the low end of our full-year adjusted EPS outlook range by 15 cents. We now expect adjusted EPS of $6.45 to $6.60.* Additionally, we are raising our sales outlook to a range of $58.5 to $59.5 billion. This reflects organic growth expectations of 3 to 4 percent versus our prior expectation of 2 to 4 percent.* We remain confident that our portfolio of global industry leading franchises is well positioned and will continue to create long-term sustainable shareowner value.”
Second quarter GAAP EPS of $1.80 was up 9 cents (5 percent) versus the prior year and included 5 cents of restructuring. Adjusted EPS of $1.85 was up 2 percent. Sales of $15.3 billion were up 3 percent, driven by 3 points of organic growth and 1 point of net acquisition growth, partially offset by 1 point of adverse foreign exchange.
Net income for the quarter was $1.4 billion, up 1 percent versus the prior year. Cash flow from operations for the quarter was $2.1 billion (149 percent of net income attributable to common shareholders) and capital expenditures were $446 million. Free cash flow of $1.7 billion in the quarter was 118 percent of net income attributable to common shareowners.
In the quarter, new equipment orders at Otis were flat versus the prior year and increased by 11 percent organically at UTC Climate, Controls & Security, each at constant currency. Commercial aftermarket sales were up 4 percent at Pratt & Whitney and were up 7 percent at UTC Aerospace Systems.
UTC updates its 2017 outlook and now anticipates:
- Adjusted EPS of $6.45 to $6.60, up from $6.30 to $6.60*;
- Sales of $58.5 billion to $59.5 billion, up from $57.5 billion to $59 billion (up 2 to 4 percent, including organic sales growth of 3 to 4 percent*);
- There is no change in the Company’s previously provided 2017 expectations for free cash flow, share repurchases, or the placeholder for acquisitions.