HARTFORD, Conn. (AP) — United Technologies Corp. posted a 26 percent drop in fourth-quarter net income from continuing operations on Wednesday due to one-time items including restructuring costs and completing its $18.4 billion Goodrich acquisition.
But the Hartford, Conn., conglomerate's huge bet on the aerospace business is paying off, and it posted strong revenue gains for its jet engine maker Pratt & Whitney and UTC Aerospace Systems.
CEO Louis Chenevert called 2012 a "transformational year" for United Technologies with the purchase of Goodrich and a $1.5 billion deal by Pratt & Whitney to buy out Rolls-Royce from a joint venture that makes engines for the Airbus A320.
"We closed the year better than we had anticipated," he said.
United Technologies' net income from continuing operations was $945 million, or $1.04 per share, meeting Wall Street expectations for the October-December quarter. When including the impact from discontinued operations, profit came to $2.06 billion.
United Technologies has been selling non-essential energy and industrial products businesses to help finance the Goodrich purchase.
Acquisitions helped lift revenue 14 percent to $16.44 billion, short of the $16.65 billion prediction of analysts polled by FactSet.
Chief Financial Officer Greg Hayes told investor analysts on a conference call that the Goodrich deal cut into profit for 2012 by 6 cents per share — "a little better than what we had expected" — due to lower financing and "more importantly, better underlying performance in the Goodrich business."
He was cautiously optimistic about economic growth, warning of uncertainty this year in Europe and the United States.
Still, he said the economy has shown "signs of stabilization, particularly in Europe" and a gradual recovery in the U.S., led by a rebounding housing market. Residential heating and cooling equipment and building security orders in North American markets jumped 20 percent in the quarter, but revenue fell to $4.15 billion, down 6 percent over last year's fourth quarter.
Sales more than doubled at UTC Aerospace Systems and also rose at Pratt & Whitney and Sikorsky Aircraft, which manufactures helicopters.
Edward Jones analyst Christian Mayes said United Technologies will benefit from rising spare parts orders this year after airline customers spent 2012 building up inventories to conserve cash.