United Tech sees sales uptick in China; posts profit beat

Wed Apr 27, 2016 3:38pm EDT
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By Alwyn Scott

NEW YORK (Reuters) - United Technologies Corp saw an uptick in equipment orders in China in the first quarter, Chief Executive Greg Hayes said in an interview on Wednesday, as the company posted results that beat analyst estimates.

The maker of Pratt & Whitney aircraft engines and parts, Otis elevators and climate controls and security systems, expects activity in China and Europe to keep rising, Hayes said.

"It feels like things have at least bottomed out both in Europe and in China," Hayes said. "We expect a better back half (of the year) at Otis as well as at our climate controls and securities business."

The U.S. market continues to be strong, with new orders for Otis equipment up 33 percent in North America, Chief Financial Officer Akhil Johri said in the same interview.

The company's shares rose 1.3 percent to $106.06.

Sales of aftermarket aircraft parts and repair services rose an exceptional 19 percent in the quarter. That reflected the market catching up after slow sales last year and a rise in major overhauls of V2500 engines on Airbus A320 planes that are reaching a service milestone. The company expects the trend will continue for the next few years, though at lower growth levels.

In addition, airlines are flying more hours, and some are keeping older planes in service, requiring more spare parts.

"We have seen (aircraft) retirements last year slow down as fuel prices have slowed down," Hayes said.   Continued...

The ticker symbol for United Technologies is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) February 23, 2016. REUTERS/Brendan McDermid