United Technologies Corp. Reports Operating Results (10-Q)
United Technologies Corporation provides a broad range of high technology products and services to the building systems and aerospace industries. Those products include Pratt & Whitney aircraft engines space propulsion systems and industrial gas turbines; Carrier heating air conditioning and refrigeration; Otis elevator escalator and people movers; Hamilton Sundstrand aerospace and industrial products; Sikorsky helicopters and International Fuel Cells power systems. (Company Press Release) United Technologies Corp. has a market cap of $50.29 billion; its shares were traded at around $53.38 with a P/E ratio of 11.1 and P/S ratio of 0.9. The dividend yield of United Technologies Corp. stocks is 2.9%. United Technologies Corp. had an annual average earning growth of 13.6% over the past 10 years. GuruFocus rated United Technologies Corp. the business predictability rank of 3-star. Highlight of Business Operations: The decline in revenue contributed to a consolidated operating profit decline of 22% in the second quarter of 2009, as compared with the same period of 2008. This year-over-year decline also reflects the adverse impact of higher restructuring charges (10%) and the negative impact of foreign currency translation combined with currency hedges at P&WC (combined 7%). To help mitigate the impact of the global economic downturn and better position us for the future, we continue to focus on restructuring and cost reduction actions. During the second quarter of 2009, we incurred restructuring charges of $301 million for actions to help mitigate the volume declines and to reduce structural and overhead costs across all of the businesses. We expect full year restructuring costs to total approximately $750 million, including the $464 million of charges incurred in the first six months of 2009. However, no specific plans for significant other actions have been finalized at this time. In addition to savings from restructuring, we are seeing benefits from other cost reductions, in areas such as travel, furloughs, research and development and employee attrition. This continued focus on costs that are within our control, including restructuring, has resulted in approximately $550 million of discrete cost reductions in the first six months of 2009.
Our growth strategy contemplates acquisitions. The rate and extent to which appropriate acquisition opportunities are available, acquired businesses are effectively integrated and anticipated synergies or cost savings are achieved, can affect our operations and results. During the first six months of 2009, we invested approximately $197 million in acquisitions, which consisted primarily of a number of small acquisitions in both our commercial and aerospace businesses. We recorded the excess of the purchase price over the estimated fair value of the assets acquired as an increase in goodwill. As a result of acquisition activity and the finalization of purchase accounting, goodwill increased approximately $158 million in the first six months of 2009.
Read the The complete ReportUTX is in the portfolios of David Williams of Columbia Value and Restructuring Fund, David Williams of Columbia Value and Restructuring Fund, Kenneth Fisher of Fisher Asset Management, LLC, Kenneth Fisher of Fisher Asset Management, LLC, David Dreman of Dreman Value Management, David Dreman of Dreman Value Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Dodge & Cox.