Carrier Corporation, a United Technology Corporation (UTX) company, has initiated the sale of its bus air-conditioning business in the United States and Canada to Mobile Climate Control, a subsidiary of Ratos AB, a Sweden-based financial investment company.
Carrier’s North American bus air-conditioning business had revenues of $60 million in 2010 with 50 employees. It serves transit, inter-city and school bus customers in the U.S. and Canada with rooftop, rear-mount and split systems.
United Technologies has strong market positions in aerospace/defense and global infrastructure with a portfolio that includes: Carrier, Otis, Hamilton Sundstrand, Pratt & Whitney, Sikorsky and Fire & Security.
The company invests in game-changing technology across the business, with its Aerospace companies continuing to make progress on their key development programs. For example, the Pratt GTF core has accumulated more than 260 hours, validating the performance expectations, and Sikorsky’s Canadian Maritime helicopter continues its successful flight testing with first deliveries scheduled for the end of the year.
The company is expected to deliver double-digit earnings growth in FY10, given restructuring savings and an improving end-market environment. Emerging markets continue to do well, with particular strength in India and Brazil.
In addition to restructuring savings, the company is also seeing the benefits of other cost reduction actions in areas such as travel, furloughs and E&D employee attrition. The company’s cost reduction initiatives have led to a year-over-year increase in its consolidated and segment margins and have also expanded earnings.
The company’s most significant actions were at Carrier, related to ongoing portfolio transformation initiatives in overhead cost reduction projects, and at Hamilton Sundstrand, which continued to advance the low-cost sourcing strategy.
The financial performance of the company depends on conditions in the construction and aerospace industries. The company is also highly dependent on the U.S. government’s budgetary allocation for defense.
A reduction in capital spending in the commercial aviation or defense industries could have a significant effect on demand for UTX’s products, which could have an adverse effect on its financial performance or results of operations. Its business may also be affected by government contracting risks.
The company’s Carrier segment offers heating, ventilating, air conditioning, and refrigeration systems, controls, services, and energy-efficient products for residential, commercial, industrial and transportation applications.
United Technologies Corporation provides high technology products and services to the building systems and aerospace industries worldwide. Growth is attributable to acquisitions and the internal development of existing businesses.
Otis, Carrier and UTC Fire & Security (collectively referred to as the commercial businesses) serve customers in the commercial and residential property industries worldwide; Carrier also serves commercial, industrial, transport refrigeration and food service equipment customers.
Pratt & Whitney, Hamilton Sundstrand and Sikorsky (collectively referred to as the aerospace businesses) primarily serve commercial and government customers in both the original equipment and aftermarket parts and services markets of the aerospace industry; Hamilton Sundstrand and Pratt & Whitney also serve customers in certain industrial markets. Honeywell International Inc (HON) is a major competitor.
We currently have a Neutral recommendation on United Technologies Corporation.
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