HARTFORD, Conn. (AP) — Aerospace conglomerate United Technologies Corp. reported Tuesday its second-quarter earnings rose 7.7 percent, beating Wall Street expectations.
The maker of elevators, helicopters, jet engines and other products raised the low end of its 2014 earnings outlook, citing strong results in the first half of the year.
The Hartford company's profit increased to $1.68 billion, or $1.84 per share, from $1.56 billion, or $1.70 per share, in the same quarter a year earlier. The average per-share estimate of analysts surveyed by Zacks Investment Research was for earnings of $1.79.
Revenue climbed 7.4 percent to $17.19 billion from $16.01 billion in the same quarter a year ago, and beat Wall Street forecasts. Analysts expected $16.68 billion, according to Zacks.
For the full year, the company now expects earnings between $6.75 per share and $6.85 per share, slightly higher from its previous guidance between $6.65 per share and $6.85 per share. Analysts expect earnings of $6.85 per share for the year, according to a poll by FactSet.
Chief Financial Officer Greg Hayes told investor analysts on a conference call that an engine fire last month in the Pentagon's new-generation F-35 fighter is "certainly disappointing," but the engines go through rigorous testing.
"The good news is that the issues are unrelated, and in the big picture the fixes will be relatively minor," he said.
The entire fleet of nearly 100 planes was grounded after a fire at Eglin Air Force Base in Florida on June 23. A Pentagon spokesman said inspections had not disclosed a systemic problem and defense officials believed the aircraft will return to full flight.
Hayes also said United Technologies has a "fix in place" on Bombardier's CSeries test flight program that was grounded May 30 following what Bombardier called an "engine-related incident" during testing. He said the problem was a leak from an engine oil seal and the plane is expected to fly in a few weeks.
Hayes said it was "not a big deal" and will not require significant engineering development costs.
Edward Jones analyst Christian Mayes said investors expected United Technologies to raise the high end of its earnings guidance, not the low end, and the share price reflects that expectation, he said.
Shares of United Technologies fell nearly 2 percent in morning trading, to $110.89.
Shares have declined 82 cents, or 0.7 percent, to $112.98 since the beginning of the year, while the Standard & Poor's 500 index has increased 6.8 percent. However, the stock has increased $10.87, or 11 percent, in the last 12 months.