HARTFORD, Conn. (AP) — United Technologies Corp.'s third-quarter profit rose just 1 percent, and the aerospace and building systems conglomerate warned Tuesday that weak military aerospace sales are expected to cut into revenue this year.
Its acquisition of commercial aerospace parts maker Goodrich Corp. helped boost revenue as cuts in U.S. military spare parts orders took a toll on its helicopter maker, Sikorsky. Chief Financial Officer Greg Hayes last month also warned that the automatic federal budget cuts that took effect in March threaten to take a bigger bite out of profit in 2014 than United Technologies initially expected.
The Hartford, Conn., company said net income for the three months ended Sept. 30 was $1.43 billion, or $1.57 per share, including 2 cents per share from discontinued operations. That's up from $1.42 billion, or $1.37 per share, a year ago.
Revenue rose 3 percent to $15.46 billion, helped by acquisitions.
Analysts polled by FactSet, on average, expected lower earnings of $1.54 per share on higher revenue of $16.21 billion.
United Technologies bet big on rising airline orders. Goodrich, acquired for $18.4 billion last year, accounted for 2 percent of the revenue growth in the third quarter. Only 1 percent was due to growth at existing businesses from improved sales and higher output.
Revenue fell at UTC Climate, Controls and Security, which sells heating and ventilating equipment; jet engine maker Pratt & Whitney; and Sikorsky. Sales rose 24 percent at UTC Aerospace Systems, which includes Goodrich.
Edward Jones analyst Christian Mayes said United Technologies and other industrial manufacturers are struggling in the weak economy to increase revenue, but are boosting profitability by cutting costs and increasing productivity.