It's a day and age -- and set of market circumstances -- when solid earnings are welcomed, even when they're accompanied by cautionary comments about what lies ahead. That's exactly what Hartford, Conn.-based United Technologies (NYSE:UTX) delivered on Wednesday, albeit to the tune of a slight slippage in its share price in the midst of a solid overall day for the market.
For the quarter, the company chalked up an 8% increase in net income, to $1.15 billion, or $1.23 a share, versus $1.06 billion, or $1.08 a share, for the year-ago quarter. Revenue for the most recent quarter dipped 1% to $14.5 billion. The dart-throwers on Wall Street had it partially right with expected income per share of $1.23 on revenue of $14.85 billion.
The bright spot for the company remained its aerospace units. Sikorsky, Hamilton Sundstrand, and Pratt & Whitney all achieved higher revenues and operating profits in the quarter. Indeed, on the very day that United Technologies announced its results, Pratt & Whitney reported that it had received a U.S. Navy contract to provide engine readiness for the Naval Air Strike Warfare Center's F-16 Aggressor Squadron.
But lest you think that all is hunky-dory with the company, both United Tech and its fellow technology company SPX Corp. (NYSE:SPW) announced on Wednesday that they'll cut costs aggressively going forward.
Indeed, United CFO Greg Hayes said on the post-release call with analysts that the first half of 2009 will be more difficult than the second half. "We expect first half results to be below the bottom end of the full year range, plus or minus 5%. ... we still expect a modest recovery in the latter part of 2009," he said.
In the meantime, United plans to reduce its workforce, which likely will lead to about $150 million in restructuring expenses. It'll have company with manufacturer Eaton Corp. (NYSE:ETN), which earlier in the week said it would part ways with more than 5,000 workers.
So United Technologies falls in line with other tech companies telling us about their strong quarters, like Big Blue, aka IBM (NYSE:IBM), and the now Jobs-less Apple (NASDAQ:AAPL). But in United Technologies' case there was a caveat about the future. As such, as closely tied as certain of the company's businesses remain to nonresidential construction, I'm inclined to exercise caution in loading up on shares in what otherwise is an unusually solid entity.
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