United Technologies Corporation (UTX) reported third quarter 2009 earnings per share of $1.14 and net income attributable to common shareowners of $1.1 billion, down 14% and 17%, respectively, from the year ago quarter. This was ahead of the Zacks Consensus Estimate of $1.12. 

Revenues for the quarter at $13.4 billion were 11% below prior year including organic decline (7%) and adverse foreign currency translation (3%). Segment operating margin at 14.5% was 20 basis points higher than the prior year. 

Cash flow from operations less capital expenditures was 160% of net income attributable to common shareowners on significant inventory reductions across both commercial and aerospace businesses. Cash flow from operations was $1.9 billion, including $150 million of domestic pension contributions. Capital expenditures were $161 million in the quarter. 

United Technologies expects 2009 earnings per share at $4.10, the midpoint of the prior range of $4.00 to $4.20. The current Zacks Consensus Estimate stands at $4.09 per share. This guidance also reflects higher restructuring of $800 million this year with one-time gains of around $175 million, compared with $750 million of restructuring and $200 million of gains assumed earlier. 

Cash and equivalents stood at $4.6 billion with long term debt at $8.7 billion and shareowner’s equity at $11.3 billion at the end of the quarter. Debt to total capitalization was at 35%, an improvement from 40% at the beginning of the year. 

United Technologies Corporation provides high technology products and services to building systems and aerospace industries worldwide. Major competitors are General Electric Company (GE) and Boeing Company (BA). 

We currently have a Neutral recommendation on United Technologies.
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