UTC Sees Better Second Quarter, But Sikorsky Lags

 - July 23, 2013, 3:55 PM
Despite a dip in sales and operating profits at its Sikorsky helicopter subsidiary, United Technologies reported improvements in its second-quarter earnings. (Photo: Sikorsky Aircraft)

While Sikorsky Aircraft’s parent company, United Technologies (UTC), reported improvement in its second-quarter earnings compared with last year, the helicopter manufacturer itself experienced a decrease of 3 percent in sales, a 24-percent decrease in operating profit and a drop in return on sales of 2.8 basis points. In a webcast today, Greg Hays, CFO of UTC, attributed the decreases partly to weak military aftermarket sales, which he said were down 25 percent, and the fact that sequestration is making it harder to process orders for spares. Lower demand is also a factor, as “Sikorsky was a beneficiary of the Afghanistan campaign,” he said.

However, Sikorsky did see higher year-over-year (YOY) shipments of aircraft in the second quarter compared with last year: 15 commercial aircraft (an increase of eight YOY) and 47 military aircraft (up four YOY).

Meanwhile, Pratt & Whitney saw an increase of 5 percent in sales, a 5-percent increase in operating profit and no change on return on sales. Orders for large commercial engine spares were up 65 percent, including the benefit from UTC’s incremental share of International Aero Engines.

Overall, “We had a solid first half of the year and continued to deliver,” said Louis Chênevert, UTC chairman and CEO. “Strong execution, additional restructuring savings, and growing backlogs give us confidence to increase the lower end of our earnings-per-share range.”